Investing in Bordeaux wine: time to buy?
Other regions may have been making headlines, but some classic wines from Bordeaux are looking perhaps surprisingly attractive to collectors.
Fine wine buyers have been coming back to Bordeaux and experts suggest pricing on some top vintages may offer opportunities. While other regions may have grabbed the fine wine market spotlight, Bordeaux has been quietly putting a run together in the past 12 months.
‘On the secondary market, Burgundy is still flavour of the month, but we do see more people coming back to Bordeaux and prices are correspondingly increasing,’ said Jamie Ritchie, worldwide head of wine at Sotheby’s.
The Liv-ex Fine Wine 50 index, which tracks the first growths exclusively, rose by 11% in the year to 31 July. But it’s not just first growths. Château Palmer has been a top performer on the Fine & Rare [price] Index at auction house Acker so far this year.
Investing in Bordeaux wine: the 2005s
More generally, some Bordeaux wines from top vintages appear undervalued, say experts. Ritchie highlighted 2005, which he described as on the boundary between young and old. ‘They are outstanding wines,’ said Ritchie.
The picture will naturally vary between estates, but Ritchie said Bordeaux 2005s looked undervalued as a general rule. ‘I would expect them to come up in price pretty significantly over the next three years as we come up to the 20th anniversary [of the vintage].’
Château Latour 2005 has already risen in the past year, according to Liv-ex (see ‘Tasted & rated’). As a broad guide, Liv-ex quoted market prices for 2005-vintage first growths as follows (12x75cl in bond):
- Lafite Rothschild 2005: £7,600 (UK en primeur release: £3,750)
- Mouton Rothschild 2005: £5,700 (UK release: £3,500)
- Margaux 2005: £6,500 (UK release: £4,500)
- Latour 2005: £7,250 (UK release: £4,500)
- Haut-Brion 2005: £6,700 (UK release: £3,500)
As previously reported, Liv-ex has also noted renewed secondary market interest in the lauded 2009 and 2010 vintages. High release prices before a market slump in mid-2011 means that several Bordeaux 2010 wines remain cheaper today than during en primeur for that vintage.
While some analysts have reported sluggish momentum on younger Bordeaux vintages at times in recent years, there is evidence of more buoyant trading activity. Matthew O’Connell, head of investment at Bordeaux Index, said prices have increased faster on younger vintages than on more mature Bordeaux wines this year. Yet he added that the quality peaks in the 2015 and 2016 vintages also continued to look undervalued, given these vintages’ benchmark status.
Ritchie said mature Bordeaux remained strong on the secondary market, but he noted the 2016s ‘are generating interest’. He also said people ‘are realising that 2012s and 2014s offer good value for money and you can drink them now’.
Of the wider fine wine market, Wine Owners head of professional portfolio management Miles Davis recently wrote that the market ‘is calm, well underpinned by global demand – and a good place to be’. He added: ‘Blue-chip Bordeaux is well bid and is enjoying its best time for quite a while.’
O’Connell said resurgent demand from Asia-based buyers has helped. Ritchie said that a pause to additional US import tariffs on certain European wines has been a boost for Bordeaux, too. O’Connell also said the market is benefiting from people with money who are actively looking for opportunities. He described wine as ‘pretty inflation-proof’, adding that with prices expected to climb, there is arguably a ‘strong reason to buy wine now rather than in the future’.
Monitor: the latest sales activity
En primeur: the winners
Which Bordeaux 2020 wines sold best en primeur? Philippe Tapie, head of the Grands Cru Committee of the Bordeaux Négoce union, told Decanter: ‘Globally we are all very satisfied, because we sold a lot of wine.’ Prices rose to varying degrees, and the overall campaign divided opinion, but several top wines saw good demand.
The list includes Châteaux Mouton Rothschild, Lafite Rothschild, Margaux and Haut-Brion, plus Cheval Blanc and Ausone, said Liv-ex, following a survey of its UK member merchants.
Other estates named include Châteaux Canon, Figeac, Les Carmes Haut-Brion and Rauzan-Ségla. Yet total sales of Bordeaux 2020 wines among Liv-ex’s UK member merchants were slightly down on the 2019 and 2018 vintages in value terms, and the proportion of grand vin that different châteaux released en primeur was again a talking point.
Elsewhere, a recent Sotheby’s online-only auction based in Hong Kong suggested Bordeaux’s lauded 1982 vintage remains attractive.
Six bottles of Lafite Rothschild 1982 fetched HK$150,000 (£14,000/US$19,000), versus a pre-sale high estimate of HK$120,000.
A double magnum of Petrus 1982 also fetched HK$150,000, against a high estimate of HK$130,000, while 12 bottles of Latour 1982 were sold for HK$150,000, though this was $20,000 below the pre-sale high estimate.
Tasted & rated for Decanter Premium
Château Latour, Pauillac 1CC, Bordeaux 2005 98 pts
Latour 2005 came joint-top with Château Margaux when Andy Howard MW tasted the five first growths from this highly rated Bordeaux vintage. ‘Drinking beautifully, but will age extremely well,’ Howard said in his recent tasting note for Decanter Premium subscribers.
Latour 2005 was the most traded wine by value on Liv-ex in the week ending 5 August, and its market price of £7,250 (12x75cl in bond) was up by about 17% over 12 months.
As previously reported, Latour planned to release a small amount of ex-cellar stock of 2005 grand vin in September, marking the wine’s final commercial release.
The Bordeaux Index View
Fine wine & spirits specialists Bordeaux Index kindly sponsor this section of Decanter, and provide their view on the market here. They can be found at bordeauxindex.com.
So far in 2021, the Bordeaux market has performed very much as we expected on a headline basis: significant upwards price movements (mid to high single-digit %) without too much distinction between first growth, super seconds and Right Bank. However, there has been a particularly noteworthy trend towards younger vintages outperforming, which is somewhat different to our expectation. This has led to significantly flatter price ‘curves’ for Château Lafite, for example – something that gathered pace in July.
As ever, ascribing such a trend just to Asia would be an over-simplification – there are multiple factors at play. The move is significant enough, though, that one has to ask whether further ‘flattening’ may ensue and whether the inherent premium for 10- to 20-year-old wines will remain.
Beyond this specific consideration, we remain positive on the outlook for Bordeaux over the coming 12-18 months, thinking we are only partway through a slightly overdue positive period.
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