2013 Bordeaux harvest and wine investment

Richard Boyle - Vin-X BloggerIt could be said that the fortunes of the fine wine market are inextricably linked to the quality of each Bordeaux vintage. This was the simplistic view in years past but I believe no longer strictly remains  true. What does remain true is that judging by various reports before and after the harvest, 2013 Bordeaux is not going to be a great vintage.

2013 Bordeaux Grape HarvestIt all started with a very cold spring which delayed flowering and has reduced yields by up to 20% and made it the smallest yielding vintage since 1991. Despite a decent amount of heat and sunshine in July and August, this was not enough and when the rain and humidity returned at the end of September many of the red grapes were not yet fully ripe (white seems to be fine) and many growers picked in panic because of the threat of rot. By rights they should still be harvesting now but the elements have conspired against them.

The only chateaux that will benefit are those with deep pockets who have been able to pick quickly, use their optical sorting machines and have the benefit of first-class winemaking technology. I have heard it described (and not by the Queen) as “Une annee compliquee”.

So what does this mean for the fine wine investment market? According to the latest Liv-ex market report, Bordeaux’s share of the market has dropped to 80%. This was due to less than stellar 2011 + 2012 vintage and less than judicious pricing by the Bordeaux chateaux overall (I exclude some of the 1st Growths who at least tried to be competitive). It looks like 2013 will be a vintage for the drinker rather than the investor in the main. The top chateaux with their access to the best technology will still produce quality wine but it will only sell well if it is priced accordingly. There have been indications that the First Growths won’t drop their prices much if at all. If the Super Seconds and top Right Bank wines keep their prices high then it could well be that investors continue to look elsewhere for the value. We have seen Bordeaux’s share of the fine wine trade decline from 95% in 2011 to only 80% according to the latest Liv-ex market report. Whilst it will always remain a staple of any investment portfolio and with good reason there remains the increasing possibility that its dominance will wane as the market continues to broaden and investors look for value elsewhere. Therefore it is critical that the Bordelais price this vintage correctly if they want to retain market share.