Tag: Bordeaux

Why has confidence in fine wine increased in 2020?

Despite the headwinds of 2020 – tariffs, Brexit uncertainty and the global pandemic – the wine market has remained robust. Today’s post examines what has changed and offers an explanation as to why we are seeing greater confidence in the market during these exceptional times.

Increased liquidity

One of the key changes this year is an increase in market liquidity, which is reflected in the rising value of bids and offers on the Liv-ex marketplace. The total exposure (total value of bids and offers) reached a new record high of £81 million last week – a £30 million increase this time last year.

In recent months, both bids and offers have been on the rise. The bid to offer ratio (i.e. the total value of bids divided by the total value of offers) currently stands at 0.6. Traditionally, a bid-offer ratio of 0.5 or higher suggests positive sentiment.

A broadening market

Another noticeable difference is that more wines than ever are attracting buying interest, taking market share from the traditional strongholds of Bordeaux and Burgundy. As the chart below shows, the wine market has undergone considerable broadening in the past decade. Bordeaux’s share has halved from its peak in 2010 when it accounted for 95.7% of secondary market trade by value. As its share declined, others shined. Burgundy was the first and main benefactor; its trade share rising from 0.6% in 2010, to a record high of 19.7% in 2019. It has dipped slightly this year to 17.4%.

This year, Italy has been the big winner. Having reached an annual average of 8.8% in 2019, Italy now accounts for 15.3% of fine wine trade. As recently highlighted, the US wine market is also developing at unprecedented rate. USA accounted for just 0.1% of trade in 2010. Year-to-date, it stands at 7%.

And then, there is the Rest of the World – an increasingly diverse category. Up from 0.8% in 2010 to 5.9% in 2020, RoW trade so far in 2020 has been led by trade for Australia (1.8%), Spain (1.4%) and Germany (1%), though wines from Argentina, Austria, Chile, and Portugal to name but a few are seeing more and more activity.

What has changed?

So, why are we seeing such increased confidence in the wine market? One well-documented explanation is that investors are seeking to put their money into safer assets in these uncertain times. Historically, fine wine has offered steady returns and low volatility.  Another explanation is that there are simply more market participants than ever before. The number of wine businesses trading on Liv-ex has increased 15% in 2020 alone. This increase in members reflects a growing trend since the Covid-19 pandemic took hold – businesses are looking for web-based solutions to grow their sales.

One such solution is trading automation. Trading automation makes it easier for merchants to list stock for sale, exposing their diverse inventory to an ever-growing marketplace. Regions that once struggled to find a secondary market have been benefitting from the shift to online sales, particularly as lockdowns have closed much of the physical retail. Through APIs, stockholders have been able to list and advertise various wines to a far greater audience, as merchants have connected their customers to this ever-broadening market. Subsequently, wine merchants and private collectors have been able to find less well-known wines from a greater range of wine regions.

Despite an early swoon as the first lockdown took place, the fine wine market would seem to be in a relatively healthy place today. As a tangible, finite asset, it offers stability in a volatile world. It also of course offers a great deal of pleasure for imbibers who are locked down and deprived of their usual wining and dining! And importantly technology, as in so many sectors, has helped merchants from across the globe, to adapt, making wine more accessible and more exciting to all with an interest in it. Combined, these three things have put the wine market on a firm footing in 2020.

Source: Liv-ex

 

 

Château Montrose Bicentenary Case Sells at Auction

To mark the launch of the Bicentenary case, Château Montrose entrusted the sale of case No. 1/200, to Hart Davis Hart Wine’s online “Finest & Rarest Wine Auction”. The auction took place on Saturday 24 October, with bidding closing at $24,000. The winning bidder, a collector from United States, will also be enjoying a memorable experience during a private stay at Château Montrose.

The bicentenary custom-designed case is a true “cabinet of curiosities” with a limited edition of 200 to celebrate our 200th anniversary. Inside are three numbered bottles in a rare 2-liter format: The 2014, 2016, and of course the 2015 bicentenary vintage, reflecting three rich and varied expressions of the Montrose terroir.  The case encompasses a cigar box and games compartment, which offers two decks of cards, two sets of dice, a set of dominoes, backgammon,150 casino chips as well as a humidifier and hygrometer.

The remaining 199 Château Montrose Bicentenary Cases will be available upon request : http://www.chateau-montrose.com/en/chateau-montrose-bicentenary-case-an-iconic-aquisition/

#wineauction #finewine #wine #winelovers #winecollectors #wineinvestors #winetasting #fineandrare #chateaumontrose #montrose #grandvin #grandcru #medoc #saintestephe #bordeaux #instawine #tradition #history #wineaddict #drinkbordeaux #redwine #frenchwine #secondgrowth #drinksbusiness #sommelier

The CIVB (Conseil Interprofessionnel du vin de Bordeaux) to set aside wines from 2020 to reduce oversupply

At its AGM last week, the Bordeaux wine marketing council CIVB unanimously approved the introduction of a reserve stock aimed at “reducing the increase in marketable inventories of red Bordeaux and Bordeaux Supérieur appellations”. By adopting an amendment to the three-year trade agreement for 2020-2023, the CIVB is pursuing the objective outlined last year by chairman Bernard Farges, which is “to re-establish a balance between supply and demand for Bordeaux wines”.

“We are currently witnessing an imbalance in the market due to crop levels in excess of sales”, sums up Ann-Cécile Delavallade, head of the CIVB’s economic department. According to the statistician’s estimates, inventories of AOC Bordeaux should reach 2.2 million hectolitres during the 2019-2020 marketing season, which is a 21% rise in one year, before distillation is taken into account. Stocks of Bordeaux Supérieur are estimated at 1.05 million hl (+14%). “We are seeing an upward trend in stocks, requiring the introduction of regulatory measures”, stresses Delavallade.

The Bordeaux region will benefit from crisis distillation – 450,000 hectolitres are currently subsidized though an extension is needed. It will also cut its yields significantly in 2020, dropping to 50 hectolitres per hectare for Bordeaux, compared with 54 hl/ha in 2019. Nevertheless, the idea of introducing collective stocks is being viewed as a complementary measure. In practice, volumes set aside are “calculated on the basis of 2020 appellation applications: above 45 hl/ha for AOC Bordeaux and 43 hl/ha for AOC Bordeaux Supérieur, both within the limits of authorized annual yields”. This represents a 10% reduction in the immediate marketing potential of the two AOCs.

BARON PHILIPPE DE ROTHSCHILD APPOINTS ARIANE KHAIDA TO MANAGE ITS CHÂTEAUX WINES DIVISION

The Board of Directors of Baron Philippe de Rothschild SA has recently appointed Ariane Khaida to the position of Executive Director, Châteaux Wines – this includes: Château Mouton Rothschild, Château Clerc Milon, Château d’Armailhac, and Domaine de Baronarques. Effective July 1, 2020. Ms Khaida will also sit on the Board of Directors of Opus One, Chile’s Almaviva and Domaine de Baronarques in the Languedoc.

Born into a non-winemaking family in the Champagne village of Rilly la Montagne, Khaida spent five years working for luxury goods giant LVMH, two of them as the buyer of Louis Vuitton leathers, a role that saw her select skins all over the world.

In 2014 she was the first woman to be made the head of a major Bordeaux négociant house, running Duclot, owned by the Moueix family.

As the manager of leading Bordeaux merchant houses, Ms Khaida demonstrated her energy, her decision-making ability, her capacity for forward-thinking and her excellent knowledge of the world of fine wines.

She will succeed Philippe Dhalluin, who has decided to retire after more than 15 years as manager of the company’s estates and will relinquish his position as Executive

Director, Châteaux Wines on 1 July 2020.  In order to ensure the smooth handover of responsibilities within the Châteaux Wines division, he will continue to serve as Adviser to the Chairman until 1 December 2020, at which date he will leave the company.

“My family and I express our deepest thanks to Philippe Dhalluin for all his wonderful work. Over the last 15 years, he has taken Mouton Rothschild and our other family châteaux to an unprecedented level of excellence and reputation. He has also been successful in attracting and training the necessary talents to continue our unceasing quest for excellence”, said Philippe Sereys de Rothschild, Chairman and CEO of Baron Philippe de Rothschild SA.

Wine Technology:  Bordeaux’s first wine with augmented reality label revealed

Château Laffitte Carcasset has just released a new wine which, when viewed through an app on a smartphone, appears in augmented reality.

The wine, a classic 60% Cabernet Sauvignon 40% Merlot blend, is destined for the export market and pays tribute to a key figure in the region’s history.

Jean Lafitte bought a wine estate in ‘Carcasset’ in 1781, naming the estate after himself and passing it down to his children.

The 35-hectare estate has partnered with the SnapPress app and POSQA, a start-up that supports augmented reality projects, on the initiative.

The producer hopes it brings “young, connected consumers” to the brand, and also to Bordeaux.

Made from grapes sourced from the 2016 vintage, the wine was fermented in stainless steel vats before being matured in oak for 12 months, creating a wine that is approachable and “easy-to-drink in its youth”.

Eden Villages, owned by French businessman Pierre Rousseau, acquired a majority stake in estate in 2017. Since 1958 it had been owned by members of the Padirac family.

Upon acquiring Laffitte Carcasset, his first winery, Rousseaux said he would implement a renovation and restructuring project, drawing on his experience gained through running his company, which specializes in mobile homes and motorhomes and already deals in the wine tourism sector.