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Bordeaux Trade Update, News & En-Primeur

Wine Investment, News, Bordeaux, En Primeur


Bordeaux led trade since last Friday (14th of April), accounting for 41.4% of total trade by value. Some of the most active wines were the Chateau Haut-Brion 2018 and 1990, Chateau Climens 2015 and 2016, and Chateau Margaux 2000 and 2008.


Champagne also rebounded over the weekend after a few weeks of subdued trade, coming in at 14.9% of the total. This uptick in activity was buoyed by the 2008 vintages of Taittinger, Comtes de Champagne Blanc de Blancs, Dom Perignon x Lady Gaga Rose, Bollinger R.D, Krug, Clos du Mesnil and Dom Perignon Rose.


The wines driving the Left Bank 200

With the En Primeur 2022 campaign on the horizon, performance of the Bordeaux 500 has been relatively stable. While all sub-indices of the Liv-ex 1000 are down year-to-date, the Bordeaux 500 fell the least (only 0.3%).


One of the sub-indices driving Bordeaux’s performance is the Left Bank 200, which is up 0.7% year-to-date and up 4.2% over the past year.


The chart below shows the wines in the Left Bank 200 which outperformed their parent index over the past year. Among the top performers, we find Duhart-Milon (up 13.7%), Calon-Segur (up 11.5%) and Ducru-Beaucaillou (up 10.7%).


Depending on the success of this year’s En Primeur campaign, many might look at back vintages to find better value.


News


Burglary at Château Pavie

French police are currently investigating an alleged break-in at Premier Grand Cru Classe A Chateau Pavie in Saint-Emilion. The break-in was reported on Friday 14th April, and it is stated that numerous cases of high end wine were stolen.


The regional newspaper Sud-Ouest states around 30 cases were stolen and the damage caused is understood to be considerable. The theft arises just prior to the annual en primeur barrel tasting that will take place in the last week of April in Bordeaux.


En-Primeur


In 2018, 2019 and 2020, customers have been buying en primeur heavily. There is now less demand for the 2021 vintage as the prices seem a touch too high and not aligned with the global markets, so back vintages are of interest. One catalyst here could be the relevance of interest rates. This time last year interest rates in France were 0.8% versus 4% at present. For those merchants, negociants and buyers relying on credit to buy the 2021 vintage will be squeezed on prices. Of course, for the Chateau this may be a different story for those who have sold successfully.


For the 2022, the quality is said to be very good and the quantity is small for production yields. The 2022 is tipped to be a powerful character, acidic and well concentrated. However, this is not the same outlook that is place for the 2003 or 2009, which are blockbuster years for Bordeaux. The one thing that is not presented yet for the market, is the pricing for the 2022 vintage. The consensus is that prices will be up on recent years. This may well be attributed to many factors, some may include that production costs have increased, bottles have almost doubled in price, so producers and consumers will have to pay more going forward.


In short demand is still growing, and production is decreasing. Large formats for bottles are now increasing in demand which people want more and more. Some chateau are producing 30% less this year. If we look back to 1982, you will see that today in comparison some of the yields are almost down by almost 50%. The market would not be surprised to see prices over the next 2 years increase into double digit range.


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