Investing in Spanish wine: a market waiting in the wings

Spain flies below the radar in a fine wine market dominated by famous French and Italian labels, but there is still plenty for investors and collectors to consider.

Vega Sicilia’s Unico, a flagship investment grade Ribera del Duero wine, has appeared solid but not stellar on the market of late. ‘Vega underperformed the wider wine market last year,’ said Matthew O’Connell, CEO of LiveTrade and head of investment at Bordeaux Index. ‘An index of seven vintages of Unico on LiveTrade implies price growth of only 6%,’ he told Decanter.

Demand is there, however. ‘We sell through [Unico] quickly,’ O’Connell added, although he said Unico Reserva Especial, a separate multi vintage blend, is less well understood.

‘I’d say Vega [Sicilia] follows what you might have historically described as a sensible wine pattern; prices go up gradually and they start to peak more when they’re harder to get.’

Looking at secondary market demand for Spain more broadly, Sotheby’s told Decanter that its top five Spanish producers at auction in 2021 were Vega Sicilia, Dominio de Pingus, La Rioja Alta, Alvaro Palacios and Artadi (in Rioja’s Alavesa sub-region). Liv-ex, a global marketplace and analyst for the wine trade, also highlighted momentum behind Marqués de Murrieta Rioja.

Meanwhile, Rioja’s debut on the prestigious Place de Bordeaux distribution system last year – in the shape of Yjar 2017 from winemaker Telmo Rodríguez – caught the attention of many critics. Rated 98 points by Decanter, Yjar 2017 was released internationally at £924 per 12-bottle case in bond, according to Liv-ex.

The move is another sign of Spain increasing its fine wine market presence.

‘We’ve really championed Spain in the last four to five years and we’ve a great following for it,’ said Georgina Crawley of UK-based merchant Goedhuis & Co. Rioja is one of the few regions worldwide where it’s possible to taste wines back to the 1950s and 1960s, she added.

For collectors, Spain offers a treasure trove of riches. ‘I’m loathe to speak too much about Spain, because I think it’s probably the last great (open) secret in the wine auction world,’ said Charles Antin, head of wine auction sales at Zachys. ‘These are amazing wines, with complexity and ageing potential, at affordable prices.’

Antin told Decanter: ‘We sold about $628,000 of Spanish wine at auction in 2021 – not a large amount of our $109m in sales, for sure. That said, the wines we did sell sold for 45% over the low estimate, so the demand is there.’

Vega Sicilia and Dominio de Pingus dominated Zachys’ top 50 Spanish lots sold in 2021, although Antin also highlighted an 18-litre melchior of Alvaro Palacios’ L’Ermita from Priorat.

Despite Spain’s ongoing reputation for offering value, prices for top Spanish wines haven’t been static (see ‘Monitor’, below). Analyst group Wine Lister recently reported a price index for Spain that was up by 42% over 10 years.

However, O’Connell said he only saw Vega Sicilia and Pingus as true investment-grade options. Quality is unquestionably high on other producers’ best labels, including many in Rioja, but there is a lack of active trading, he said.

Leading Rioja names such as López de Heredia, Roda or Muga sell quickly, but demand is more collector-driven. This isn’t negative, said O’Connell, but ‘for a liquid market you have to have two-way activity’.

He said López de Heredia prices have risen, yet trading was limited. ‘It sells on release and people keep it, and that’s not an active market.’

Investing in Spanish wine: latest sales activity – Major names still lead

Liv-ex said recently that the number of different Spanish wines trading on its global marketplace has risen 290% in five years. Marqués de Murrieta’s Castillo Ygay Gran Reserva Especial, Rioja 2010 was a standout performer last year, up by about 50% in price over 12 months to £1,600 (12x75cl in bond, Liv-ex market price). Still, Liv-ex said Vega Sicilia’s Unico (see p134) constituted about 21.5% of the value of 2021 Spanish wine trades. This was led by demand for the 2010 and 2006 vintages. Unico 2009 rose the most in price, up by 11%, but ‘still offers relative value compared with other vintages’, Liv-ex added.

At a recent Sotheby’s auction, two magnums of Unico 2009, sold separately, fetched £875 and £813, against a pre-sale high estimate of £550 per lot. The auction’s top Spanish lot was six bottles of Pingus 2005, which fetched £4,000.

Beyond wine, Charles Antin of Zachys pointed to interest in Chartreuse liqueur, ‘from the time when it was made in Tarragona’. These bottles have ‘a certain mystique that still drives collectors wild’.

Tasted & rated for Decanter Premium

Vega Sicilia, Unico, Ribera del Duero 2012

The 2012 is the newest release of Unico, a wine dominated by Tinto Fino (Tempranillo) with a small amount of Cabernet Sauvignon. Unico 2012 is ‘a textbook example of controlled, red-fruited elegance’, wrote Sarah Jane Evans MW, giving it 95pts. Although perhaps more restrained than ‘the glorious 2009’, Evans praised Unico 2012’s ‘sumptuously ripe fruit’. She also gave 97pts to the new edition of multi-vintage wine Unico Reserva Especial. ‘The 2022 release, a blend of the complexity of 2008, the structure of 2010 and the freshness of 2011, is far more than the sum of its parts.’

The Bordeaux Index view

Fine wine & spirits specialist Bordeaux Index kindly sponsors this section of Decanter, and provides its view on the market here. It can be found at bordeauxindex.com Spain was certainly one of the less eventful segments of the wine market in 2021, with the two most significant blue-chip wines – Vega Sicilia and Pingus – registering mid single-digit type returns, figures which do not compare well to the broader wine market.

Demand remains on an upwards trajectory but somewhat staccato, not gathering the momentum which regions such as Tuscany have achieved in recent years. Nevertheless, we see both Vega Sicilia and Pingus as wines which merit a place in a diversified wine portfolio, just not as top-priority items.

There continues to be outsized demand for certain wines such as López de Heredia Rioja, though ongoing secondary market availability restricts the investment relevance of such names even if the underlying numbers are interesting. Certainly there is old-fashioned financial merit (ie, ‘buy two, sell one in a few years, drink the other for free’) in Rioja – something to be welcomed by collectors.

Related content

Investing in Italian wine: market on the move

Investing in Champagne: No signs of slowing