Wine investment: La Place releases into tricky market
The autumn La Place releases took place amid tricky market conditions, with buyers seeking safety in 'semi-mature' vintages of proven fine wine labels.
September has become a key month for Bordeaux négociants to distribute new vintages of international fine wines to certain markets, potentially providing more evidence of buyer sentiment.
While there has been debate within parts of the trade about the suitability of the model for all wines, La Place de Bordeaux’s September campaign now represents top-quality labels from around the world and the concept offers a potential opportunity for producers to reach a broader collector base.
Key wines include the 2021 vintages of Super Tuscans Masseto and Solaia. International merchant Bordeaux Index highlighted strong critical ratings on both wines, but said much would depend on price.
Among other upcoming La Place de Bordeaux releases to track, Bordeaux Index has highlighted the 2021 vintages of several Napa Valley wines: Opus One, Inglenook Rubicon, Dalle Valle Maya and Beaulieu Georges de Latour.
Liv-ex, a global marketplace for the trade, said in August that a subdued market may present particular challenges for wine labels new to La Place, adding: ‘It is a tough time to be trying to build a brand.’
Long-established names on La Place, such as Masseto, must also navigate the current tricky market environment, though, Liv-ex pointed out.
It said Masseto 2020 was ‘seemingly fair value [when it was released in September 2023] with its high ratings, [but] has traded consistently below market price over the past year’.
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Madrid hosts charity wine event Golden Vines 2024
Masterclasses with famous wineries, a special charity auction and luxurious dinners will form part of The Golden Vines 2024 event, organisers have announced.
To be held in Madrid from 25 to 27 October, the event follows editions in Paris, London and Florence, said organiser Liquid Icons.
Created in 2021 to celebrate wine and spirits excellence, it also honours late, great sommelier Gérard Basset OBE MW MS.
Alongside masterclasses and lunches with star names, such as Château d’Yquem, Vega Sicilia, Krug and Dom Pérignon, there will be The Golden Vines Awards Gala dinner.
A Sotheby’s-hosted auction of ‘money-can’t-buy oenology experiences’ will raise funds for the Gérard Basset Foundation, which focuses on mentoring, education and training in the fine wine and spirits world.
Weekend event tickets cost £10,000 per person, and include a VIP concierge service.
Market MOT
Recent price data on semi-mature vintages, combined with the prospect of falling interest rates, have offered some positive signals for the fine wine market going into September – but it’s early days.
There have been some indications of a possible ‘turnaround’ for the prices of more mature vintages, observed Matthew O’Connell, CEO of the LiveTrade online trading platform at international merchant Bordeaux Index.
‘Krug 2006 and Latour 2000 are good examples of the trends of semi-mature Champagne and Bordeaux, respectively,’ he said. Prices for these wines have stabilised in recent months, following declines to different degrees, as data from LiveTrade shows (see chart, below).
However, Krug 2006 has outperformed Latour 2000 over three years, largely reflecting sharp price increases for certain prestige Champagne brands in 2021 and 2022.
Liv-ex, a global marketplace for the trade, stated in its August report that buyers are searching for ‘safe havens’, which include more mature vintages.
Its Bordeaux Legends 40 index, which tracks certain top wines from the 1989 vintage onwards, crept up in value by 0.2% in July, having also risen slightly in June.
Still, the group’s benchmark Liv-ex 100 index dropped 1.1% in July and was down 9.7% over 12 months. Interest rates may be a significant factor to watch.
The Bank of England lowered its key rate by 0.25% on 1 August, to 5%, although said it would proceed cautiously on further cuts.
In the US, speculation was building over a possible Federal Reserve interest rate cut in September.
Bordeaux Index and Liv-ex have both cited rate cuts as potentially helpful for inspiring greater spending on fine wine.
Will Hargrove, head of fine wine at merchant Corney & Barrow, described the Bank of England’s rate cut as ‘a step in the right direction’, although he said the wine market remained quite sedate.
Hargrove said that he felt there’s still interest in fine wine, but that buyers’ caution reflects their uncertainty about whether prices could fall further.
He likened market sentiment to ‘a mass sitting on of hands’. Yet, he said it’s ‘definitely a buyer’s market’, and highlighted attractive prices on ‘mid-aged’ Bordeaux and Burgundy.
The Bordeaux Index view
Fine wine & spirits specialist Bordeaux Index kindly sponsors this section of Decanter, and provides its view on the market here every issue. It can be found at bordeauxindex.com.
The softening of the wine market across 2023-2024, reversing some (but not all) of the sharp gains from 2021-2022, is well documented.
The main factor driving this movement is a brake on discretionary spending, which was triggered by a sudden surge in interest rates as inflation rose out of control.
For the most part this has led to fewer buyers and lower buying quantities, rather than a large number of sellers.
As we – potentially – look towards a gradual or indeed perhaps faster decline in interest rates, it would be surprising if this does not reverse the current trend.
Wine prices are anyway strained at their current levels in a historical context, with the largest declines in cross-regional prices previously in the -10% context vs more like -15% now.
We have started to observe early positive signs of a turnaround in pricing in more mature vintages – indeed it is usually the pattern for price growth, as there is more of a prompt for buyers to act with lower supply on the market.
It will be interesting to observe across the coming months whether a change in interest rate expectations will catalyse a recovery of more significance.
Krug 2006 and Latour 2000 are good examples of the market trends for semi-mature Bordeaux and Champagne, respectively.
Disclaimer: Decanter’s Marketwatch pages are published for informational purposes only and do not constitute investment advice. Wine prices may vary and they can go down as well as up. Seek independent advice where necessary and be aware that wine investment is unregulated in several markets, including the UK.
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Chris Mercer is a Bristol-based freelance editor and journalist who spent nearly four years as digital editor of Decanter.com, having previously been Decanter’s news editor across online and print.
He has written about, and reported on, the wine and food sectors for more than 10 years for both consumer and trade media.
Chris first became interested in the wine world while living in Languedoc-Roussillon after completing a journalism Masters in the UK. These days, his love of wine commonly tests his budgeting skills.
Beyond wine, Chris also has an MSc in food policy and has a particular interest in sustainability issues. He has also been a food judge at the UK’s Great Taste Awards.