Liv-ex indices end 2016 with historic first and excitement over Burgundy 2015

Geoffrey DeanWhile investors will be noting the stock market’s relentless bull run since soon after the Brexit vote, they will also be remarking on Fine Wine’s inexorable rise in value. Liv-ex’s Fine Wine 100 index, calculated at the end of every month, rose yet again in December to complete an historic first: an increase every month in 2016, the first time that has happened in any one year.

The fact that it was a small upward movement of 0.4% in the final month of 2016 was not especially relevant. Trends are what count, and for the 13th month in succession, the index, which covers the 100 most traded fine wines on the secondary market, went up. The key facts are that the index rose 24.8% in 2016, and is at its highest point since November 2011.

Burgandy CrossWith top Burgundy in short supply, it was little surprise that Domaine de la Romanée-Conti’s 2012 La Tâche was the biggest riser in December, going up 9%, although several leading Bordeaux labels were in hot pursuit, notably 2009 Vieux Château Certan. Also showing good gains were Cheval Blanc 2010, Penfold Grange 2009 and Haut-Bailly 2009.

Liv-ex’s 1000 index, an altogether broader measure, also finished the year at an all-time high of 299.80, up 1.1% for December and 22.3% for the year. It, too, has increased for 13 consecutive months. Looking at regional sub-indices, Burgundy
was up the most (26%), closely pursued by Bordeaux Legends 50 (24.9%) and Bordeaux 500 (23.1%).

Meanwhile, as London hosts the annual tastings of the latest Burgundy vintage on sale (2015), investors might like to know how the great guru of all things Burgundian, Jasper Morris MW, has assessed it. “It was an exceptionally dry and often hot summer, though happily the water table had been well replenished through the winter,” he said. “Both a naturally small bunch-set and the dry conditions have limited the size of the crop, though welcome rainfall in August partially offset the drought. However, one feature of the summer, which may well have had a positive effect on the wines, is the extraordinary luminosity: clear, bright skies consistently, rather than heavy, lowering heat.

My first thoughts were that this would be a red wine vintage – which it certainly is – but the whites are turning out to be far superior to what might have been, given the long, hot summer. Whereas in 2009 there were some great wines from a small proportion of producers who picked early enough, in 2015 the great majority made the right call and there are not many clumsy wines.

Grape VinesThey are full of fruit and flesh, yet with adequate acidity, and most have a fine, fresh feel to them. Chablis was complicated by the hail storm over the night of 31st/1st August which damaged the yield for many, though the rain which fell outside the hailed area was in fact a blessing.

In many ways the reds marry the concentration of 2005 with the juicy charm of 2010, a combination which works very nicely mathematically. Michel Lafarge cites 1929 as the comparison.”

Morris says prices are up for three clear reasons – the quality of the vintage, the scarcity of the 2016 vintage and the significant decline in the value of Sterling. “If ever a vintage deserved to be sold at a premium it is 2015,” he concludes. Investors will still be sorely tempted.