Final Thought: Value For Money? Regional Roundup
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Anthony Maxwell, Liv-ex Director
- 18 Sep 2018 | News & Views
Value for money is often a contentious topic of debate between wine producers, merchants and consumers. Buying the best wines from a region is one way to ensure quality, yet savvier collectors might want to consider how much it costs on average to access the best wines of a region, in order to maximize value for money.
The tables below show the average price for the five most recent physical vintages of wines considered to be the top wines of their respective regions, both now and in August 2013. These are mostly consistent with the wines that make up the regional indices. The calculations for Burgundy exclude DRC, Romanée-Conti as its high 12x75 price would distort the mean.
White wines offer the cheapest entry point to fine wine. Unsurprisingly, Sauternes is the cheapest region to collect, becoming 11.3% less expensive over the last five years as global interest in sweet wines has continued to wane.
Arguably Champagne remains relatively good value due to the production of quality wines in high volumes (Dom Pérignon typically produces around 400,000 cases in a vintage year) keeping prices in check.
Super Tuscans—produced in similar volumes to the Bordeaux First Growths—offer the most economical entry point for fine red wines. Over the last five years the region has fallen behind the Rhône, an area that has been formerly ignored by the market despite high scores and good vintages. This appears to have changed slightly in the last year due to the high critic scores awarded to many wines from the 2015 and 2016 vintages.
Spurred on by Chinese demand, it now costs 30.8% more to buy into Australia than it did in September 2013. On the flip side of this, Bordeaux’s Left Bank has ‘benefited’ from the fall in market prices since the 2011 bubble and is now 5% less expensive to build a collection in. Meanwhile Spain has jumped ahead, in part because of two recent 100-point vintages of the extremely low production Pingus sitting in the market for around £12,000 ($15,777) per 12x75.
At the most expensive end of the table, the value placed on scarcity continues to drive market prices higher. Rare American wines, such as Screaming Eagle, continue to become dearer. Bordeaux’s Right Bank has diverged from the Left thanks to the outstanding performance of Petrus and Le Pin.
But of course it’s no surprise to see Burgundy at the apex of the fine wine world, with prices still to defying gravity. The finest white wines from the region have increased in price by 61.9% over the last five years, making them now nearly as expensive as the best Champagnes. But it is the rarity of red Burgundy that makes it the most expensive group of wines traded on Liv-ex. Over the last two years the Burgundy 150 has climbed 50.3%. Savvy drinkers might baulk at these prices but buying into Burgundy has been one the best possible investments in the wine market. If this momentum continues, and the fundamentals suggest that it could, then buying into Burgundy now might offer the bravest collectors some long term value.
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 contributes articles to Wine Journal that we feel are of market relevance to readers, but we do not specifically endorse this company.