Fine Wine Market: Bordeaux Dominates Weekly Wine Trade, Followed Closely by Burgundy and Champagne

The wine market is an ever-evolving landscape where regional preferences and vintage demands can shift rapidly.

This week, Bordeaux continued to lead the trade, followed closely by Burgundy and Champagne, each region bringing unique dynamics to the market.

While Bordeaux and Burgundy commanded the lion’s share of trade value, Champagne emerged as a strong contender, particularly in volume.

Bordeaux's Market Leadership

Despite a slight decline from its previous strong performance of 48.2%, Bordeaux remained the dominant force in the market, capturing 41.0% of the trade by value. This continued dominance is attributed to the high value of Bordeaux wines in trade, with three of the top-traded wines by value hailing from this prestigious region. Notable among these was Château Latour 2010, which, despite trading at GBP 8,408 (EUR 9,944) per 12×75 (an 8.6% discount to its Market Price), remains a significant player due to its perfect 100-point score from Neal Martin (Vinous) in 2020.

In contrast, while Bordeaux dominated in value, it was less prevalent in volume, where Champagne and Burgundy took the lead.

Burgundy's Rising Share

Burgundy secured the second position in the trade share, with its portion increasing to 20.8% from 18.8% the previous week. The region's wines, known for their elegance and complexity, continue to attract significant interest. However, the market dynamics for Burgundy are nuanced, as evidenced by the performance of Domaine de la Romanée-Conti (DRC). La Tache 2006, despite its storied reputation, traded 11.1% below its Market Price this week, reflecting a broader downward trajectory in the DRC index. Nevertheless, the long-term value growth of DRC wines remains robust, having quadrupled in price since their initial release.

Champagne's Renewed Demand

Champagne saw a resurgence in demand, driven in part by the release of Dom Perignon 2015 on Monday. This release revitalized interest in the region, pushing Champagne's trade share to 15.7% this week from just 10% in June. Dom Perignon 2015 quickly became the second most traded wine by value, although it traded at GBP 1,590 (EUR 1,880), slightly below its recommended selling price of GBP 1,750 (EUR 2,070). The release also sparked interest in other Dom Perignon vintages, contributing to Champagne's strong performance.

Tuscany and Piedmont's Declining Trade Share

Despite notable interest in specific vintages such as the 2021 Tenuta San Guido’s Sassicaia and Ornellaia, and the 2016 Bruno Giacosa Barolo Falletto Vigna Le Rocche Riserva, both Tuscany and Piedmont experienced a decrease in trade share. This shift highlights the market's fluctuating nature and the fierce competition among wine-producing regions.

The USA's Surging Presence

The USA more than doubled its trade share to 5.8% from 2.6% the previous week, primarily driven by California wines. Screaming Eagle Sauvignon Blanc and Harlan Estate were particularly noteworthy, with multiple vintages changing hands. This surge underscores the growing appeal and recognition of high-quality American wines in the global market.

Market Trends and Insights

1. Older Vintages Lead Trade Value: All of the top-traded wines by value this week were from older vintages, highlighting the premium placed on aged wines. Château Latour 2010 and Petrus 1995 were significant contributors, with the latter showing an impressive market appreciation of over 500%.
2. Petrus' Scarcity and Premium Pricing: The strong performance of Petrus 1995, trading at a 16.5% premium for magnums, underscores the scarcity and high demand for this iconic wine. Limited production and tight allocation contribute to its market value.
3. Stability of Château Lafite Rothschild: Château Lafite Rothschild maintained its position as a top-traded wine, with nine different vintages changing hands. The 2009 vintage was particularly popular, demonstrating the brand's resilience and stable demand in a volatile market.
4. Value Trends in the Secondary Market: The top-traded wines by volume were all priced under GBP 2,000 (EUR 2,365), indicating a growing preference for more affordable options. This trend is reflected in the overall market, with trade value down by 4.2% month-on-month, but volume down by only 2.8%, suggesting increased activity in lower-priced segments.

Conclusion

This week's wine market activity underscores the dynamic and multifaceted nature of wine trading. Bordeaux's continued leadership in trade value, Burgundy's rising share, Champagne's renewed demand, and the USA's surging presence all highlight the diverse interests of wine collectors and investors. As older vintages lead in value and more affordable wines gain volume, the market continues to offer opportunities for a wide range of participants. Whether driven by heritage, quality, or scarcity, the stories behind these wines reflect a rich tapestry of tradition, excellence, and evolving consumer preferences.

Source: Liv-ex