A new report from Liv-ex, the global wine trade marketplace, shows vulnerability for Burgundy fine wines. However, it also points towards reasons for fine wine investors and traders to be positive.
For a number of years, the Burgundy fine wine market has been enjoying meteoric price rises. In fact, this has been a dominant theme for at least five years. However, in 2019, prices began to drop for some of the biggest names in the market.
How much have Burgundy fine wine prices fallen?
During 2019, according to the annual market report for Burgundy compiled by Liv-ex, prices stuttered for some of the most popular Burgundy wines. This includes a number of Domaine de la Romanee Conti wines.
The report tracks the ‘Burgundy 150’, which are the most traded Burgundy wines on the platform. In 2019, the Burgundy 150 was the worst performing regional index on the platform, with its value falling by 8.8%.
According to the report, 2019 “has highlighted the vulnerability of Burgundy’s high prices.” However, traders and fine wine collectors should be aware that where this will lead is far from certain. It’s too soon to know what the long-term trends will be for 2020, as there are many economic and political factors at play.
Increase in number of Burgundy wines being traded
The Burgundy 150 has leapt up by 445% over the last 16 years (since 2003). The biggest rate of growth was between 2016 and 2018. For more context, compare this growth with the benchmark Liv-ex 100 with its 202% growth since 2003. Similarly, the Liv-ex 50 has grown by 235% since 2003 – this covers the five Bordeaux first growths – Haut-Brion, Latour, Margaux, Mouton Rothschild and Lafite.
Liv-ex says that the fall in prices mostly covers the very top-tier Burgundy wines. It also points out that there has been a 48% increase in the number of Burgundy wines traded on the Liv-ex platform in 2019.
This means that more fine wine collectors have been seeking out cheaper wines that may hold more value sometime in the future. This includes a number of wineries that have innovative and upcoming winemakers leading the way.
Due to this increase in the number of Burgundy wines on the platform, the region achieved a 20% share of trades by value. This represents a record high total for Burgundy, and further compounds the fact that Bordeaux no longer commands more than 90% of the fine wine trade.
For a lowdown on fine wine terminology check out our earlier blog here, and stay tuned for more updates on the fine wine market throughout 2020.