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Bordeaux 2016—The Lucky Few

  • Anthony Maxwell, Liv-ex Director

  • 21 Jun 2017 | News & Views

Bordeaux 2016 is entering its final stretch. Around two-thirds of the major Châteaux have now released their wines, including all of the First Growths by Latour. It has been a campaign of mixed fortunes.

Ahead of the campaign, merchants expressed two key concerns: First—and not unusually—was trepidation about price rises, particularly among U.K. buyers who are purchasing with a weaker sterling. Second, following the frosts that hit Bordeaux at the end of April, was concern about the availability of stock. There was a feeling that Châteaux and negociants might be tempted to hold back stock or raise prices further to make up for next year’s losses.

Reactions to prices have been mixed. Early on, price rises were modest, averaging 7%. These rises began to edge higher around a month ago, and have averaged 13% since. Several—Pavie, Angelus and Cheval Blanc, for example—have struggled to be absorbed by the market, causing the campaign to stutter.

Still, a handful have been well-received and are reported to have sold out. Generally speaking, these are wines that released below the ‘fair value’ suggested by Liv-ex methodology. This means that release prices were considered fair compared to scores and prices of back vintages. Canon 2016 is one example. It was offered at £880 per case by the trade—half the current price of the 2015 with only one less point (per WA).

Initially, Lafite-Rothschild 2016 looked similarly exciting. Based on the ex-negociant price, it was expected to be released at £5,500 by merchants—significantly below the ‘fair value’ of the wine. However, it quickly emerged that this offer represented only a small portion of the stock; the trade is still awaiting the second tranche.
 
In recent weeks, the situation surrounding the frost has become clearer. Gavin Quinney’s helpful frost map, published on Liv-ex Insights, highlights the areas most affected. Growers on patches of Pomerol and Saint-Émilion were among the worst affected; the banks of the Northern Médoc were relatively unscathed.
 
In spite of this, ambiguity about available volume has dogged this year’s campaign. Allocations to several wines have been cut compared to last year. As reported by the drinks business, reductions of around 20% have become normal. Montrose 2016, for example, was considered a “compelling opportunity,” releasing around 30% below fair value—but merchants couldn’t get enough from their “tiny allocations.” You can’t always get what you want. And so it would seem.

In short, sensible prices are not universally being backed up with volume, suggesting that some Châteaux have little interest in selling. “Sold out,” it would seem, doesn’t necessarily mean “none left.” To paraphrase a newsletter sent out by Quinney last week: the wines that you want, you can’t find—and nobody wants to buy the wines that are available. Bordeaux 2016, then, has been a year for those able to secure their favorite cases—the lucky few.

Readers should take note that the views of this author represent those of a company with an interest in the wine trade. Liv-ex operates the global marketplace for fine wine. It offers trading, data and settlement services to professional buyers and sellers of fine wine. Private collectors can view Liv-ex prices and value their portfolios using Cellar Watch and find regular market analysis on the blog. The opinions of Liv-Ex are their own and do not represent those of Robert Parker Wine Advocate or Wine Journal. Liv-Ex contribute articles to Wine Journal that we feel are of market relevance to readers, but we do not specifically endorse this company.

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