What’s happening in the market?
Screaming Eagle, Oakville Cabernet Sauvignon 2022 is the top-traded wine of the week so far. The 2022 first traded in March at £19,200 per 12×75, and changed hands this week at £18,000.
Jacques Selosse 2012 is in second place, trading at £11,626 per 12×75.
Today’s deep dive: have the Bordeaux 2021s bottomed out? And where are the 2022s heading?
The 2021 vintage has gained notoriety for its sharp decline in the market. Particularly given their relatively low scores, the 2021s were released at too-high prices across the board. The En Primeur campaign coincided unfortunately with the turn of the market in mid 2022, exacerbating the implausibility of their prices. They began to trade in Q4 2023, their prices falling quickly — many by over 20% in their first physical year on the market. Until recently, price declines have showed no signs of letting up; of the 44 2021s included in the Bordeaux 500, 41 are available below their ex-London release price, 39 below their ex-negociant release price and 27 below their ex-chateau release price.
While the 2021s are continuing to trade actively, supply far outweighs demand. The stock overhang is apparent in the 2021’s bid:offer ratio. While the Bordeaux 500’s ratio (by value) sits at 0.27, the 2021 components’ ratio has fallen to 0.11. Considering only Bordeaux 500 components, there are over 1,700 12×75 cases of 2021s on offer. This compares to 791 cases of 2020 on offer in May 2024 and just 390 of the 2019s in May 2023.
Is the end in sight?
In the past two months, we have seen several 2021 trade prices converge and tick upwards, some even trading above their Market Prices. This tends to be a positive sign – where trades lead, Market Prices follow. In the case of Duhart-Milon 2021, for example, Market Price fell to £400 per 12×75, while trades took price slightly higher (around the £420 per 12×75 mark). In April, its Market Price rose to £519 and has sustained through May and June, with trades following suit.
Promising examples
Liv-ex trades of Duhart-Milon 2021
Liv-ex trades of Montrose 2021
Liv-ex trades of Canon 2021
Liv-ex trades of Petit Mouton
Where do the 2022s stand?
With the market well into its third year of the downturn, buyers are understandably cautious. The 2022s – many of which were priced higher than the majority of physical vintages – are off to a much slower start than the 2021s.
This year’s En Primeur campaign brought attention to the price disparity between the 2021s (usually the cheapest on the market) and the 2022s (usually one of the most expensive). While buyers wait for prices of the 2022s to reflect market realities, the 2021s look increasingly attractive, explaining the recent uptick in the proportion of Bordeaux trade accounted for by the 2021s. Market Prices of Leoville Las Cases serve as an example of this pattern:
Leoville Las Cases
While the 2022 vintage received a better critical reception than the 2021s, this will likely not afford much protection to their prices. Having just entered the market, six large brands have already changed hands below their ex-chateau release prices – Palmer, Haut-Brion, Duhart-Milon, Pavie, Leoville Poyferre, d’Issan, and d’Armailhac.
Haut-Brion 2022 traded in June at £3,800 per 12×75/€ 370.5/btl — 13.8% below its ex-chateau release price. Its Market Price now sits at £4,876 per 12×75, 8.0% below its ex-negociant release price, with over 200 more bottles for sale at similar price by several merchants. By listing below their own cost price, stockholders are betting that prices will continue to fall, pricing attractively now to minimise further losses. Many merchants will still be holding their stock of 2009s and 2010s, wishing that they had sold them off closer to their peak rather than waiting for more favourable market conditions. Memories of these vintages and growing pressure to generate cash flows may be influencing the decision to reduce prices so soon after stock has landed.
Liv-ex trades of Haut-Brion 2022
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 620+ merchant members from across the globe. Together they represent the largest pool of liquidity in the world – currently £140m of bids and offers across 20,000 wines.
