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Talking Trade – What a difference a (tariff-free) week makes

On Friday 5 March, the United States Trade Representative (USTR) and European Trade Commission announced in a joint statement that all tariffs related to the Boeing-Airbus dispute would be suspended for four months. A day earlier, 4 March, Boris Johnson and Joe Biden also agreed upon a cease fire on UK wines/Scotch.

Perhaps unsurprisingly this triggered a renewed interest in the market from those Stateside. While American buying has been steady year to date, there has been a note of caution due to the uncertainty surrounding the tariff situation. The four-month suspension gives at least a window of certainty and has been reflected in activity both on the market and in the rather more complex challenge of shipping. Stock that was being held in Europe is once again heading across the water.

Looking at trade, where previously US buyers had focused on the tariff-free regions of Italy and Champagne, after the announcement, their eyes (and dollars) turned to Bordeaux and the Rhone. Seen in the chart below, the LIVE bid share by value for Bordeaux went from 4% pre-announcement to 55% post-announcement.

Other previously tariffed regions, such as the Rhone and Spain, also saw a significant uplift in LIVE bids. Italy, Champagne and Burgundy, particularly the former, saw their bid share decline. It will be interesting to see if this state of affairs persists over the rest of the month.

With the US renewed interest in Bordeaux, the region’s share of trade by value – driven by the First Growths – increased from last week, reaching 45.7%. At an individual AOC-level, Pauillac led trade, followed by Saint-Julien, Saint Emilion Grand Cru, Pomerol, and Margaux.

Although its share of LIVE bids from the US declined, Italy remained in favour and its overall trade share held above its February level. The Rhone broke above 4% share for the week, a decent upswing for the region. Burgundy meanwhile saw a drift from the previous week’s activity and USA trade also took a breather.

Tua Rita’s ‘Redigaffi’ 2018 was the most traded wine by value this week. The wine was released last year and has proved popular since. It is the second most traded 2018 by value from Italy in 2021, trailing only to the newly released Sassicaia 2018.

Chateau Lafite Rothschild 2018 led trade by value for Bordeaux. The 2018 vintage is the 150th produced by the estate under Rothschild ownership and has a limited-edition bottle and label to mark the anniversary.

Following the announcement of this late last year, we saw a flurry of trade and a 20% rise in the wine’s price to £7,500 per 12×75. With the star dust now settled and the latest 2018 Bordeaux review from Neal Martin now published, the wine has seen a small drift and last traded at £7,000 per 12×75.

Chateau Palmer 2018 felt the effect of critical perfection this week. On 9 March, Neal Martin awarded the wine 100 points in-bottle, calling it “a legend in the making” and saying, “there will never be another Palmer like this”. The wine had seen action around £2,800 per 12×75 before the re-scoring. It last traded at £3,260.

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