Liv-ex November Market Report

  • Fine wine struggled in October as Sterling strengthened against the US Dollar.
  • The Champagne 50 continued to thrive and rose 2.1%. Its market share also rose, while Burgundy and the USA fell.
  • Treasury Wine Estates acquired an estate in Bordeaux and launched Penfolds Grange 2018.
  • Neal Martin reviewed the wines of rising Bordeaux estate Château Les Carmes Haut-Brion.
  • Cristal is one of the top-traded wines of the year, as prices climb we examine which of its most recent vintages offers the best value.

Fine wine falters in October

Of the leading secondary market indices, only the Liv-ex Fine Wine 1000 rose in October, up 0.2%. The Liv-ex Fine Wine 100 dipped 0.5% and the Fine Wine 50 was down 0.7%.

The Liv-ex 1000 was driven by the performance of the Champagne 50. The sub-index rose 2.1% in October and was the best performing of the seven sub-indices for the fifth month in a row.

Whereas Sterling weakness gave the market a boost in September, its stronger performance against the US Dollar and Euro in October reduced the buying power of those currencies.

In addition, a 33-year record hike in UK interest rates and warnings of a prolonged recession, as well as the continued absence of Hong Kong and mainland Chinese buyers have added to the headwinds facing the market.

Chart of the Month

Champagne’s share creeps upwards

Bordeaux’s trade share declined from 40.5% to 38.1% this month and Burgundy’s went from 23.3% to 22.6%.

The USA saw the biggest decrease, down from 5.5% to 3.7%. Californian trade has been declining over the course of the year and the value traded in October was a quarter of that traded in January. The strong US Dollar has made stock in America (which accounts for a large proportion of Californian wines traded) more expensive for Sterling and Euro buyers.

Unlike other regions, Champagne’s trade share grew last month, rising from 15.4% to 18.1%. Once again, it was Louis Roederer’s Cristal that was at the forefront of Champagne trade. The 2014 was the month’s top traded wine, while Cristal 2008 and Dom Pérignon 2012were also among the five top-traded labels.

At the end of this report we examine the current market for Cristal and which of its vintages from 2008 to 2014 offer the best value.

Major Market Movers

Sir Winston Churchill leads best Champagne performers

As mentioned above, the Champagne 50 was the best-performing sub-index of the Liv-ex 1000 in October.

The five wines in the chart above were the best-performing wines last month based on their Mid Price change.

Few of the wines shown above have been the most actively traded vintages for their respective brands so far this year. For example, Philipponnat Clos des Goisses 2012 and Pol Roger, Sir Winston Churchill 2013 havetopped trade for their brands this year – rather than the 2010 and 2012 vintages shown in the table above.

Similarly, the 2008 and 2014 have dominated trade for Louis Roederer’s Cristal (see more below), and Dom Pérignon’s 2010 has seen higher demand for its 2012 and 2008 vintages.

News Insight

Penfolds’ new Bordeaux acquisition and top-traded wines

Two Bordeaux estates changed hands this October. Château Lascombes in Margaux was sold to US entrepreneur Gaylon Lawrence. Lawrence already owns three wineries in Napa Valley including Heitz Cellar.

The other domain sold was the less well-known Château Lanessan in Haut-Médoc. The 80 hectare property was sold to Treasury Wine Estates and will allow the group to increase the production of its Bordeaux and Barossa hybrid blends. The group unveiled once such blend, Penfolds II, earlier this year.

At the start of October Penfolds also launched the latest vintage of its flagship label, Grange 2018. The release prompted several trades on the secondary market and helped spur Australia to its best monthly performance since June. It has also become the sixth top-traded Australian wine so far this year (see table below).

The top-traded Australian wines on Liv-ex are all Penfolds labels. Penfolds Grange 2017 leads trade but the 2018 and 2019 vintages of its Bin 707 Cabernet Sauvignon have also been in demand.

The Grange 2017 has declined a little in price since its release. It has the lowest Wine Advocate score of the 2015 to 2018 vintages. Nonetheless, it clearly offers value at under £4,000 per case and history shows that Grange vintages appreciate over time.

Critical Corner

Les Carmes de Haut-Brion in review

Writing for Vinous, Neal Martin recently looked back at the evolution of Château Les Carmes Haut-Brion, through a vertical spanning the 1955-2019 vintages.

Martin commented that the estate had undergone perhaps the most complete overhaul of any Bordeaux château in the modern era and catalogues some of the better-known changes; the rising proportion of Cabernet Franc in the vineyard, the ‘superyacht’ winery, the use of stems and amphorae in the winemaking.

When discussing the impact this had on the wines, Martin said ‘you can easily see the melioration most marked with the 2016 vintage; the wines achieve greater complexity and precision’.

His top score went to the ‘revelatory’ 1955 which he thought, ‘conveyed real panache on the palate, holding a torch to the legendary La Mission Haut-Brion’.

The wine has never traded on the secondary market, and Martin admitted it was ‘virtually impossible’ to find. Buyers will have better luck with the ‘brilliant’ 2016, which has a Market Price of £1,400 per 12×75 having risen 108.9% since its release.

So far this year, Les Carmes Haut-Brion is the 29th top-traded Bordeaux label. However, its trade has grown significantly since 2017.

Between 2017 and 2022, its trade value has risen over 1,100.6% and its trade volume by 648.2%. So far, 2021 marks the high point for total trade in Les Carmes Haut-Brion. Though its small production and accessible prices means it will struggle to match the trade levels of other big estates.

On the other hand, it is a property with an air of expectation surrounding it. As Martin’s report re-empahsised, it is only since 2016 that vintage quality has risen.

Excitement has grown and trade has risen as a result but certain vintages are becoming harder to find. The 2016 for example had a standout year in 2019 but trade levels has withered away since – suggesting buyers are keeping their stock close and biding their time.

Final Thought

Finding value in Cristal 2008-2014

So far this year there has been one brand that has been near the top of the trade discussion every single month – Louis Roederer’s Cristal. At the time of writing it has been the second top-traded wine brand by value (just behind Château Lafite Rothschild) and most-traded brand by volume.

On an individual wine level (LWIN11), its 2008 vintage has been the top-traded wine by value overall, followed by its 2014 vintage.

Champagne is having a strong year in the secondary market. The Champagne 50 index is up 24.8% year-to-date, the second best-performing sub-index of the Liv-ex Fine Wine 1000 (the Burgundy 150 is up 28.5%).

However, the Champagne 50 has now been the best-performing sub-index for the last five months in a row, rising 2.1% in October while the Burgundy 150 rose just 0.7%. There are several brands contributing to this, not least Dom Pérignon, where the 2012 vintage has seen very high levels of trade.

Nonetheless, the real driver has been Cristal. As the chart below shows, the brand’s price performance has outperformed the Champagne 50 this year, rising 37.5%.

As mentioned above, the most in-demand vintages have been those from 2008 onwards – five vintages in total. The 2014 was only released this February yet has still taken a leading share of both the brand’s and overall market’s trade. The four vintages released before it (2008, 2009, 2012 and 2013) have all out-performed the Champagne 50 as well, as the chart below demonstrates.

Cristal is a brand par excellence. Its secondary market performance is based on the strength of its brand not the strength of an individual vintage.

The 2008 continues to sell because it is a known great vintage, while the 2014 is the latest vintage and the market frequently favours whatever is newest.

Yet this short attention span means surprises and value can lie in store for those who look a little deeper.

Finding value in Cristal

The table below shows that the five most recent vintages have all risen in price since release.

But just as the 2013 is the surprise best-performer this year (see chart above), the 2009 would have netted the greatest return on investment to date.

The 2009 has the lowest score of these five vintages but its performance once again highlights the brand power of Cristal over vintage quality.

However, for those looking to buy the best Cristal possible for their money, using the Fair Value methodology we can assess which of these vintages offers the best opportunity.

The chart below compares the current Market Prices of the latest Cristals with the scores of William Kelley at The Wine Advocate.

Here we can see that, at its current price, the 2014 looks a little overvalued. Meanwhile, the 98-point 2013 is arguably the best value Cristal at present, closely followed by the 97+ 2012.

However, scores are opinions and opinions can differ. At their current prices, these five Cristal vintages have a much better correlation with the scores of Antonio Galloni at Vinous (chart below).

In the chart below, the new 2014 looks the sensible buy right now. Though, interestingly, the 2012 continues to look good value in both instances.

Read our latest report, ‘Champagne: The growing secondary market for luxury’, here. 

Liv-ex analysis is drawn from the world’s most comprehensive database of fine wine prices. The data reflects the real time activity of Liv-ex’s 600 merchant members from across the globe. Together they represent the largest pool of liquidity in the world – currently £80m of bids and offers across 16,000 wines.

Independent data, direct from the market.