What’s happening in the market?
Bordeaux has extended its lead of the market, taking 45.1% of trade this week so far. The region has seen high volume trades of Leoville Las Cases 2020, Echo de Lynch-Bages 2012 and Blanc de Lynch-Bages 2023, alongside lower volume trades of older high value wines such as Château Latour 1982 and the 1970, 1980 and 1998 vintages of Château Lafite Rothschild.
Vega Sicilia follows Château Mouton Rothschild as the week’s second top-traded producer by value. Unico 2013 has taken the lion’s share of traded value, changing hands in high volumes above Market Price.
Today’s deep dive: bid:offer ratios of the Fine Wine 1000 and Bordeaux 500 sub-indices
The bid-to-offer ratio compares the total value of bids (firm commitments to buy) to the total value of offers (firm commitments to sell) on the market. In September, we reported on the bid:offer ratios of the Liv-ex 1000’s sub-indices as indicators of sentiment in each market. Since then, there has been little promising change — each has fallen from October to November. All but one index’s ratio – the Bordeaux Legend 40’s — sits under 0.5. Still, there are pockets of consistent demand. For certain wines, namely those benefiting from volume- or age-based scarcity and those priced correctly relative to their critical receptions, there exists a healthier demand-supply balance.
The Bordeaux Legends 40 currently boasts the highest ratio of the Liv-ex Fine Wine 1000’s sub-indices. Though dropping briefly to 0.48 in September, the bid:offer has otherwise remained above 0.5 since May — a level that has historically indicated price stability. Since the component wines hail from exceptional older vintages, it is perhaps unsurprising that they are in high demand relative to their dwindling supply.
Of component wines with more than one entry in the Bordeaux Legends 40, Petrus currently boasts the highest ratio – 0.65. This demand appears to have had a stabilising effect on its prices. Early this year, the 2010 vintage was trading at around £36,000 per 12×75. Its trade prices have since risen steadily; a case of six last changed hands in October for £19,250 (equivalent to £38,500 per 12×75).
Liv-ex trades of Petrus 2010
Bid-to-offer ratios of the Bordeaux 500
The Right Bank 50, comprised of the 10 most recent vintages of Petrus, Le Pin, Château Lafleur, Château Cheval Blanc and Château Ausone, has the highest ratio of the Bordeaux 500’s sub-indices — 0.50 in October and 0.45 in November.
Bordeaux is known not only for its abundance of high-quality producers, but also for the high volumes they can produce. With consumer tastes changing and the market for fine wine firmly bearish, it appears that recent-vintage Bordeaux produced in lower volumes (Right Bank 50) are seeing a better balance of demand than those produced in higher volumes.
Still, not all high-volume wines are suffering the same fate. The bid:offer ratio of the Italy 100 has exhibited relative strength and consistency, hovering around 0.4 since March. While not all components boast high ratios, Super Tuscans Masseto, Tignanello and Sassicaia have sustained bid:offer ratios above 0.5. Solaia’s ratio currently sits at 0.45, having fallen from 0.89 in September to 0.61 in October. Tignanello, Sassicaia and Solaia are often scored similarly to Bordeaux’s First Growths and released in similar volumes. They are released, however, at significantly lower prices – closer to the ex-London release prices of the 2008 vintage of the First Growths.
The similar volume and critical acclaim may serve as a signal to Bordeaux’s top châteaux of what prices are successfully drawing demand for higher volume wines. Where prices of recent Bordeaux vintages have fallen below ex-négociant or ex-château release prices, recent Tuscan vintages have found support at their ex-London prices.
Price performance over the past five years
The supply-demand driven price performance of the aforementioned indices is clear in the chart above. Where the downturns of the Bordeaux Legends 40 and Right Bank 50 indices have been moderated by their scarcity, that of the Fine Wine 50’s has not. The Super Tuscans, with the exception of Masseto, are readily available in high volumes, but are priced fairly enough to draw adequate demand.
Liv-ex remains open 24/7, with over £150m live, actionable bids and offers. Maintaining live exposure means you can keep trading (and turn a profit) even when you’re away from your desk enjoying seasonal festivities. Speak to your broker for assistance in uploading bids/offers in bulk. Contact your broker to find out more.
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 £100m of bids and offers across 20,000 wines.
