Q1 2020 has been dominated by the global Covid-19 pandemic and we look at which wines have reported the strongest growth over the period. Whilst Bordeaux continues to dominate the market by volume traded (average 50% market share) and rare Burgundy sales grab the headlines, Italian and US investment wines have seen sustained growth and are important targets in an increasingly diversified market by region, complementing staple assets such as Bordeaux and Burgundy First Growths in a balanced fine wine portfolio.
In terms of regional performance Italy continues to build on a stellar performance over the last six months accounting for 15.4% of trade on Liv-ex in March 2020 and 24.7% in the first week of April. The Liv-ex Italy 100 index has seen a 12-month return of 3.9% to the end of March 2020 and in the first quarter of this year performance has been influenced by releases of Barolo 2016 and Brunello 2015.
Table 1: Top ten price performers on Liv-ex Q1 2020:
|Rank||Region||Wine||Vintage||Jan. ‘20||Mar. 20||%+|
|2||Italy||Gaja, Sori San Lorenzo||2011||£2,750||£3,206||16.6%|
|3||Burgundy||Bonneau Martray Corton Charlemagne||2016||£1,790||£2,010||12.3%|
|6||Rhone||Domaine Jean Louis Chave Hermitage||2010||£4,104||£4,548||10.8%|
|8||Spain||Vega Sicilia Unico||2009||£2,204||£2,392||8.5%|
|9||Rhone||Chapoutier Ermitage Pavillon||2015||£2,280||£2,400||5.3%|
|10||Rhone||Beaucastel Ch. Neuf du Pape||2009||£590||£600||1.7%|
Source: Liv-ex.com 31.03.2020
Italy’s Piedmont region is now producing some of the most active wines on the exchange. Giacomo Conterno, Barolo Reserva Monfortino 2013, the most recent release from this top Piedmont estate, saw the highest level of trade in March, partly due to critic, Antonio Galloni, attributing it with a near perfect 99 points score and likening it to the super classic vintages, 1996 and 1999. When you compare current trade values for the 1996 vintage, selling at £12,108 (12 x 75cl) which is 35% up on the 2013 vintage and 1999 at £10,800, 28% more expensive than 2013, you get an indication of potential future growth. The 2010 vintage was awarded 100 points by Galloni and last traded at a 78% premium to its release price.
Tignanello, a favourite of Megan ‘Sussex’ and Boris Johnson, is now the top performing Super Tuscan, recording the highest level of growth of the top Italians over the last five years. The 2016 vintage, released in January 2019, is now trading at a 13% premium.
Table 2: The Top 10 most actively traded wines on Liv-ex in Q1 2020
|Rank||Wine||Vintage||Region||Last traded price on Liv-ex|
|1||Giacomo Conterno, Barolo Reserva Montfortino||2013||Piedmont, Italy||£7,400|
|2||Chateau Leoville Poyferre||2012||Bordeaux||£535|
|3||Moet & Chandon, Dom Perignon||2008||Champagne||£1,190|
|4||Tignanello||2016||Super Tuscan, Italy||£850|
|5||Chateau Lafite Rothschild||2010||Bordeaux||£6,700|
|6||Louis Roederer, Cristal||2012||Champagne||£1,560|
|7||Screaming Eagle, Cabernet Sauvignon||2007||California, USA||£32,000|
|8||Chateau Mouton Rothschild||2000||Bordeaux||£17,000|
|9||Chateau Mouton Rothschild||2008||Bordeaux||£4,033|
Source: Liv-ex.com – prices quoted (12 x 75cl) 31.03.2020
Increased demand for top Italian wines and Champagne has been an ongoing trend since the imposition of the US trade tariffs in Autumn 2019. Italy claimed 15% of regional market share on Liv-ex in March 2020 and this demand is reflected in the top ten price performers of Q1, half of which are Super Tuscans and top Piedmont wines.
Champagne is maintaining a steady 10% of market share YTD and the two most in demand wines from the region in Q 1 2020 have been Moet & Chandon, Dom Perignon 2008 (awarded 98+ points, A. Galloni) and Louis Roederer Cristal 2012. The 2008 and 2012 Champagne vintages have seen the highest levels of trade in the first quarter of the year.
Liv-ex also reported at the end of Q1 on the robust performance of US fine wines on the exchange and that top Napa brands have seen their trade share by value on Liv-ex rise to 5.2% of total trade in the first quarter of 2020 – double the average of the previous five years.
US investment-grade wines could be the latest emerging market opportunity; see our previous blog for more detail and identifying this as early as possible is obviously key to investors. Iconic Californian cult wines are an important consideration in terms of that ‘market youth’ and also as a component of a diversified fine wine portfolio. The US is an embryonic sector compared to Bordeaux and Burgundy in terms of fine wine investment and this is largely due to heritage as the top producers are all relatively young, compared to the French First Growths but, significantly also due to supply. Only a very few of the top Californian wines are considered investment-grade (have the quality, value and active secondary market) and are produced in very low numbers which are generally pre-sold to loyal US customers. Getting hold of rare Screaming Eagle outside of the wine estate’s wait list is a global challenge.
Screaming Eagle 2007 has just been ranked 7th in the top ten most traded fine wines on Liv-ex for the first quarter of 2020, trading at c. £32,000 (12 x 75cl). The US fine wine icon still has one of the most valuable sales on record with a 6 litre bottle of Screaming Eagle Cabernet Sauvignon 1992 raising US$500,000 at auction twenty years ago in 2000.
US wines are not inflicted with the current 25% Duty charges imposed on Euro wines being imported into the US so American demand may well have increased for Californian investment wines as French First Growths saw a hefty price rise for US consumers in Autumn 2019.
Bordeaux and Burgundy, both still impacted by US Tariffs, lost ground to Italy in March 2020 in terms of market share but Bordeaux maintained its monthly average YTD at 50.3% of fine wine traded on Liv-ex. The 2010 vintage, re-tasted by the key critics in February, accounted for nearly a quarter of all trade in Bordeaux and Mouton Rothschild 2003 has been the region’s wine in most demand on Liv-ex at the start of April.
Many large scale Bordeaux releases planned for March have been deferred to later in the year including the highly anticipated Latour first release since the 2011 vintage. The market also had confirmation about the postponement of the Bordeaux 2019 en primeur campaign, now expected to take place this Autumn but this will be totally reliant on the progress made against Covid-19 over the coming months.
Fine wine continues to offer a safe haven and the potential to protect capital in these extremely uncertain times and for those seeking tangible assets to protect wealth there has never been a more important time to look at fine wine. For more information see the Vin-X Guide to Investing in and Collecting Fine Wine or contact us on 0203 383 2262.