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LIVE opportunities: Burgundy turning bullish?

  • The Burgundy 150 is closing in on the all-time high it set in November 2018.
  • Price performance is being led by the most expensive wines from the region but there is increasing breadth within the category, with more than 500 wines trading this March.
  • The Burgundy bid to offer ratio, a sign of market sentiment, is higher now that it was during the three year-long Burgundy bull run.

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Nearing a new all-time high

The Burgundy 150 index hit an all-time high in November 2018 (599.99) having doubled in just over three years (39 months). But as the index rose, the air got thinner and a sell-off began in February 2019 as profits were taken and buyers began to look further afield.

Those price declines (punctured by a small, dead cat bounce) continued until this time last year, when a turnaround began. The Burgundy 150 has since seen 12 consecutive months of gains, corresponding to an 8.6% rise in the index and it is now just 6% off its November 2018 all-time high.

Prices rise at the top

Nearly all of Domaine Leroy’s Musigny Grand Cru wines that hit all-time highs at the height of the Burgundy bull run have been eclipsed by their current Market Prices. The 2015 vintage in particular has risen more than 100% and the average increase is in the range of 40% since November 2018.

Furthermore, Domaine de la Romanée-Conti’s various grand crus have also seen movement of late. Several pre-2015 vintages of Richebourg, Echezeaux and Grands Echezeaux are now at higher Market Prices than in November 2018. The same is true of some vintages of Romanée-Conti as well, such as the 2008, 2009 and 2010.

Offerings continue to expand

With this growth in prices has also come an increase in the number of wines trading in the secondary market. More unique wines have traded year-to-date than during the entirety of 2018. During the height of the Burgundy bull market 140 different distinct wines changed hands, this March alone more than 530 wines have traded.

The Burgundy market is expanding at the upper end in terms of price performance and at the lower end in terms of the number of wines available on the market – both metrics suggest momentum for the region. Most recently, the bid to offer ratio, a measure of market sentiment, surpassed that seen during the 39-month Burgundy peak. Might the region be once again poised for another run?

LIVE offers – Burgundy