Bordeaux Wine Market Recovers in 2016 Helped by Lower Pound
The Bordeaux wine market confirmed its recovery in 2016 after five years of declines that cut prices of the region’s leading wines by more than 40 percent from their 2011 peak, according to a review from the London-based Liv-ex exchange.
The Liv-ex Fine Wine 50, which comprises 10 recent vintages of Bordeaux first-growth wines including Chateau Lafite Rothschild and Chateau Latour, climbed about 26 percent for the year, and was heading for its 13th straight monthly gain in December, according to Liv-ex data.
Even with that rebound, fueled by demand stoked by lower prices and the weakness of the British pound in which Liv-ex trades are handled, the index remained some 25 percent below the peak reached in the China-led boom from 2008 to 2011, according to Liv-ex. Its broader Bordeaux 500 Index, computed monthly, showed a year-to-date gain of 22 percent at the end of November while the Liv-ex 100, with wines from other regions including Burgundy, the Rhone, Italy and Champagne, was up 24 percent.
“The fine wine market received a significant post-Brexit boost after the U.K. voted to leave the EU,” the Liv-ex report said. “A weaker sterling encouraged buying from euro- and dollar-based merchants to purchase wines that included a significant volume of high-value Bordeaux brands.”
Liv-ex said the market share of Bordeaux on the exchange was little changed this year at about 74 percent, with Burgundy taking almost 8 percent, Italy 6 percent and Champagne 5 percent.
“Bordeaux has undoubtedly been the main driver behind the broader market recovery this year, and early feedback suggests 2016 could be another quality vintage,” Liv-ex said. Next spring’s en primeur marketing campaign “will therefore be an important factor in determining the direction of the Bordeaux market in 2017.”
News by Bloomberg, edited by Hospitality Ireland