Burgundy prices are dangerous!

A Burgundy-based wine maker has commented in the trade press this week on the prices the region’s wines are currently achieving. Yannick Champ, of Nuit-St-Georges based Domaine Prieure-Roch, believes that the Burgundy values are “dangerous” and could lead to a crash similar to that experienced by Bordeaux post 2011.

Of course there is considerably more supply of Bordeaux Grand Cru and the Burgundy region has suffered climate challenges in the last few vintages reducing quantity further.

Performance is impressive with Liv-ex reporting that Burgundy was the top regional sub-indices at 26% growth in 2016, closely followed by the Bordeaux Legends at 24.9% and Bordeaux 500 23.1%.

The 2015 Burgundy vintage was well received at tastings in London in January and Burgundy specialist, Jasper Morris MW, noted that the prices were up for this vintage due to its quality, lower supply and also the scarcity of the 2016 vintage with Sterling dynamics also having affect.

Rising wine prices have had a corresponding impact on land values in the region, according to Champ, with a single hectare at village level in Cote de Nuits costing about €700,000 and in grand cru regions as much as €30million. This has been, in part, driven by Chinese property purchasers, an example of this being the purchase of Chateau de Gevrey-Chambertin by Louis Ng for a reported $US10million. Champ has been supportive of the Chinese investment seeing the positive furtherance of the physical state of the property and vines as good for the region, keeping Burgundy’s “reputation safe”.