As any lover of fine red Bordeaux knows, prices have surged over the past decade. Following the ‘correction’ in the market as it was so coyly termed in 2009 in the wake of the financial crisis, when the Liv-ex’s Bordeaux index dropped by 15%, prices for the leading châteaux have soared. Last year Liv-ex’s Fine Wine 100 celebrated its 20-year anniversary and declared a rise of over 270% - a figure that is now closer to 300% thanks to a number of record-breaking monthly rises in 2022.
Over its life, the Fine Wine 100’s makeup has changed radically. Once utterly dominated by Bordeaux, it now represents around 40% of all trades as other wines – notably red Burgundy, Champagne, and the top Italian estates have caught investors’ and collectors’ eyes.
Bordeaux: Still The Investment Wine King?
Bordeaux’s decline in 2022 was noted in recent fine wine investment report from the exchange. In it, it reviewed the headwinds that the market is facing from things like economic uncertainty, the risks from inflation, and a resurgent covid, before concluding that growth in the fine wine market was likely to continue, albeit it a slower pace.
Given Bordeaux is still by far the most traded region, the impact of these difficulties was always going to be felt on the prices for the region’s finest wines. The report noted, however, that the relatively sluggish demand was more to do with a ‘lacklustre 2021 en primeur campaign’ and ‘older vintages offering greater value’ rather than any innate loss of favour in the market.
Greater Value In Older Vintages
As we noted in our recent blog on 2021 Bordeaux, there are good wines to be had, but we expected prices to be on the high side compared to previous vintages and buyers were going to have to be far more selective than in recent years. With many châteaux having cut their en primeur stock releases and with the market buoyed after the success of years like 2015, 2016, 2018, the glorious 2019s, and very decent 2020s, release prices were often relatively high. The greater value that Liv-ex spoke of is easy to illustrate:
- Ausone 2021 - £550
- Ausone 2014 - £487
- Petrus 2021 – £3383
- Petrus 2014 - £3157
- Haut Brion 2021 - £441
- Haut Brion 2014 - £385
- Leoville Las Cases 2021 - £179
- Leoville Las Cases 2014 - £160
- Margaux 2021 - £449
- Margaux 2014 - £450
In terms of quality 2014 makes for a good equivalence. It’s striking that despite still being in cask – and we all know what strange things (good and bad) can happen in two years of cask ageing – that 2021s average out as being more expensive than the 2014s. This goes double when you consider that the 2014s are physical, many of them are already drinking, and the quantities available are diminishing which, in a market that needs stock, is likely to see them rise in price.
At MWH Wines we’ve been buying and selling Bordeaux for more vintages than we care to remember. Over that time we’ve seen this baffling obsession with the new, time and time again. At the Union des Grands Crus tasting of 2003s in October 2005, we spoke to the representative of Château Clarke. Despite the acclaim that the 2003 vintage had drawn, the representative was at pains to point out that the 2005s were far better. While with hindsight we’d tend to agree, it seemed odd that someone should be favouring a wine that was barely made over one that was soon to be shipped and which we, the trade, would soon be promoting.
It’s more understandable recently. The fine Bordeaux market has been driven by investors and the succession of great vintages since 2015 has given them much to get excited about. But even for investors, value can be found in other, historical, physical wines.
The 2009s, for example, hit the market with high prices and high scores. Many of those who bought the 2009s en primeur though had their fingers badly burnt. Coming to a market that hadn’t seen a truly great vintage since 2005, investors flocked to them and sent the lofty release prices skyward. Then the financial crash happened, China fell out of love with Lafite, the Euro fell, and investors looked for cash to sure up their portfolios. The wines values dropped and took a further beating when the equally impressive 2010s were released. A decade on since their release, the 2009s are of stellar quality and prices look relatively reasonable.
2021 An En Primeur Watershed?
2021 could well be a watershed moment in Bordeaux’s recent history. Just like 1991, after the excitement of the 1988, 1989, and 1990 vintages, we have collectors with cellars of wines that will become classics, being offered wines of moderate-good quality at highish prices that offer only moderate value.
In the early 1990s, doubtless helped by the appearance of the weak 1992s, and fine but dull 1993s, wine lovers began looking back to the 1980s. The overlooked 1985s became popular with drinkers, while those seeking returns bought into the 1986 and 1982 vintages. This time round we’re expecting people to look for vintages such as:
2005 – heralded as the vintage of the century, the best wines are now entering their drinking window
2009 – fearsomely tannic, these wines have much in common with the 1982s, albeit without the roasted character of some 1982s
2010 – elegant, powerful, complete. These are wines that will delight for decades to come
2015 – the first of a run of sublime vintages from the last decade, they are more ‘traditional’ in style and have long lives ahead
2016 – another sumptuous, ‘classic’ year
2019 – released at relatively low prices, the wines are of a quality that makes them fit to rank with the likes of 1990, 1989 and in some cases even 1982
What will happen next is anyone’s guess. As Liv-ex pointed out, wine as an investment tends to weather economic storms well. Whether investors have tired of en primeur or just didn’t fancy the 2021s remains to be seen. The heat and drought in Europe will make 2022 an interesting year; another 1947 classic or a heat-stressed 2003, only time will tell. Whatever the case, there are a lot of great wines to be had in older years and that’s where, we believe, the value lies.
Like Some Fine Wine Help?
We hope you’ve found this blog on wine investment in 2022 to be of interest, if you would like some wine advice then please do get in touch by calling Mike on 0118 984 4654 or by emailing MWH Wines here. A recognised authority on wine, he’ll be happy to advise you on which wine is right for you.
