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The broadening Burgundy market

By April 28, 2021Burgundy, Fine Wine Market

The number of Burgundian LWIN7s traded in the secondary market hit a record high in March, the number of distinct labels from the French region having risen steadily since 2018.

  • Although the Burgundy 150 experienced a slight decline between late 2018 and early 2020, the number of wines from the region traded monthly has risen greatly.
  • Both a dip in monthly trade in 2019 and recent record high this year look to be linked with the beginning and end of US tariffs.
  • Record trade for Burgundian wines in March was a standout performance in an overall upward trend.

In a recent Market Update, we examined the recent strong performance of the Burgundy 150 index and asked if Burgundy was ‘turning bullish’?

One of the interesting insights from this update was the record peak of distinct wines (LWIN7s) from Burgundy that are now trading on the secondary market.

Top of the world

As highlighted in the post, at the height of the Burgundy 150’s run in November 2018 just 140 LWINs from the region traded that month. In March of this year alone a record 538 distinct Burgundian wines changed hands.

Although the Burgundy 150 index suffered a decline between November 2018 and March 2020, this coincided with a corresponding escalation in the number of LWIN7s being traded.

Throughout 2019 the number of LWIN7s traded continued to rise higher peaking at more than 200 during the summer.

The number of Burgundian wines traded fell back under 200 in October 2019, however. At the moment when the US placed its tariffs on wines from the EU.

Rising higher

In 2020, however, the year began strongly with just over 210 Burgundian wines trading in January. This continued to build in the first half of the year, which corresponds to reports from UK merchants of Burgundy being high on the lists of customers as the Covid-19 pandemic began to take hold.

In August 2020, with the fine wine market at large in full recovery mode, the number of distinct Burgundian wines traded punched above 300.

For the rest of the year and indeed the first two months of 2021, Burgundian LWINs remained firmly at this level, until March when the number rocketed to 538.

New level?

Although the number of American buyers for Burgundy had begun to improve in the second half of 2020, the announcement from the Biden administration on 5th March of a unilateral, four-month suspension of the tariffs in place between the US and EU, caused a notable rise in US merchant activity for Burgundy (and Bordeaux).

As April draws to a close, the number of Burgundian wines traded has taken a large step backwards – but only to 410. This is still a sizeable step up from the number of labels being traded in January and February of this year and is perhaps not so far off where monthly trade for Burgundian LWIN7s was heading before the spike in March.

It remains to be seen if the number of distinct Burgundian wines being traded on a monthly basis remains at this new level. It certainly seems that the return of American buyers caused a spike last month that has corrected itself, at least to an extent.

There is no doubt, however, that the secondary market for Burgundian wines has broadened extensively. With the US-EU tariffs still suspended, possibly indefinitely, there appears to be both the appetite and plenty of room for growth in future.