Bordeaux Recovery Suggests Renewed Interest in Investing in Wine
Bloomberg reported on 21 February 2013 that a quantity of Chateaux Latour 2010 had reached a 16-month high on the London-based Liv-ex wine exchange, with another Bordeaux wine, Chateau Mouton-Rothschild 1998, posting an eight-month high. The recent performance of some top Bordeaux wines adds to the signs of a recovery in the fine wine market and suggests a growing interest in investing in wine following the market decline witnessed in 2012.
**Chateau Latour 2012 Rises on the Liv-Ex Market**
According to Bloomberg, a case of Chateau Latour 2010, a first-growth wine from the Pauillac commune, changed hands for £10,994 on the Liv-ex fine wine market this week, the highest level for the wine in 16 months, and 22 percent above the record low of £8,991 at which the vintage sold last July. The current price remains well below the £12,500 at which the vintage traded soon after its release in the wine futures market in June 2011.
Bloomberg noted that Chateau Latour 2010 is the third most expensive vintage of the past 30 years, in company with those of 1982 and 2009. The 2010’s price rally is seen as indicative of heightened buying interest across a wider group of clarets.
**“Great Flurry of Activity”**
While 2012 proved not to be a good year for investing in wine ,on account of the market decline, the end of the year did see some signs of recovery, with the Bordeaux market share rising to an eight-month high in December. And recovery in the fine wine market seems to be extending into 2013, boosted by broader investor interest and Chinese demand ahead of the Lunar New Year holiday, earlier this year than in most
Bloomberg quoted Peter Lunzer, founder of Lunzer Wine Investments, as noting that 2013 had “started with a great flurry of activity”, confirmation of which was evident in the January performance of the main Liv-ex indices. In particular, the Liv-ex Fine Wine 50 Index posted a 3.5 percent advance, its biggest monthly gain in two years. Bloomberg reported that the index has risen further this month (February), climbing eight percent from the two-and-a-half year low posted in November 2012. And going back to January, The Wine Investment Fund forecast that the Liv-ex Fine Wine 100 index, which represents the price movement of 100 of the most sought-after fine wines on the secondary market, would rise 14 percent over the current year. As noted on the Liv-ex Cellar Watch website, the Liv-ex 100 gained 2.82 percent in January.
“Many buyers sought wines which last year were ignored, and which for some time we have been saying were undervalued,” added Mr Lunzer, as quoted by Bloomberg.
!m[Chateau Latour 2010 Posts 16-Month High on Liv-Ex](/uploads/story/1489/thumbs/pic1_inline.png)
Among the other leading clarets which have recently performed well on the Liv-ex exchange is Mouton-Rothschild 1998, another Premier Cru Pauillac, which hit £3,240 on February 19, marking a 20 percent rise from last November’s 32-month low. The 2006 vintage of Saint-Emilion traded at a nine-month high of £5,200 a case this week. Bloomberg quoted Liv-ex data as showing that over the past year Latour 2004 has been the biggest gainer in the Fine Wine 50.
Investors interested in investing in wine should note that not all Bordeaux wines have participated in the apparent recovery, with Bloomberg reporting on February 20 that a case of Chateaux D’Yquem 2008 Sauternes, a Premier Cru Superieur in the 1855 Sauternes-Barsac classification, has sold for a record-low of £1,430. Chateau Mouton Rothschild 2008 is reported as having declined the most in value in the Liv-ex fine wine 50 over the past twelve months.
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