In summary, the July Report includes:
• Trading Activity – second highest of 2009
• Liv-ex 100 Fine Wine Index – flat in June
• Major Movers – young Bordeaux on the up?
• Critical corner – Robert Parker looks back at Bordeaux '82 & '90
• Final Thought – fine wine and investment: a long-term view
Log in and find the full report under the Analysis menu.
The Liv-ex 100 Fine Wine Index is the industry's leading benchmark. The value of the index as of 30th June 2009 was 214.27, a rise of 0.1% on the previous month. The index is up 4.6% year to date, and down 18.9% year on year.
July is the month when we add the latest vintage of Bordeaux to a number of our benchmark indices: the Liv-100 Fine Wine Index, Liv-ex Claret Chip and our newly launched Liv-ex Fine Wine Investables Index.
The latest Bordeaux vintage is added to our indices only when it becomes physically available. As such, it is the turn of the 2006 vintage this year.
The changes will become active from tomorrow and are outlined below:
Liv-ex 100 Fine Wine Index: Mouton Rothschild 2006 and Lafite Rothschild 2006 were selected by the Liv-ex Index Committee for inclusion, with Grand Puy Lacoste 1995 and Talbot 1986 making way for reasons of liquidity (the index concentrates only on the most actively traded wines).
Liv-ex Claret Chip Index: four wines met the index criteria for inclusion — First Growths that have scored 95 points or above from Robert Parker— with only Margaux failing to make the cut.
Liv-ex Fine Wine Investables Index: 14 wines from 2006 met the index criteria. These are all the First Growths, Cheval Blanc, Petrus and Ausone, plus Angelus, Leoville Las Cases, Mission Haut Brion, Pavie, Pichon Lalande and Pontet Canet.
Full details of each index’s components and the criteria for inclusion are available on the main website, under the analysis drop down menu.
Ever since we launched the Liv-ex 100 Fine Wine Index back in the autumn of 2003, Liv-ex has been known as the source of the fine wine industry’s leading price benchmarks. We are now launching our most ambitious index yet: The Liv-ex Fine Wine Investables Index.
Designed to track the wines commonly found in an investment portfolio, it is our largest index to be calculated using the Liv-ex Mid Price and we have also backdated it to January 1988. As such, it provides a remarkable insight into the evolution of fine wine prices over more than 20 years.
If we look at the entire data series below, we can see that prices have risen substantially. The compound annual growth rate for the index since January 1988 is 12.6%, an exceptional rate of return over such a long period.
The index consists entirely of Bordeaux wines – arguably the only fine wines that can truly be considered investable – from 24 leading chateaux. To find our components wines we used a variety of criteria, most notably the score awarded by Robert Parker. It currently consists of 183 components, which will rise to 202 in July when the 2006 vintage is included (each new vintage is added in the summer it becomes physical). The full details on how the index is calculated – including the components, weightings and full series – can be found here on www.liv-ex.com.
In the next Liv-ex Monthly Market Report we will be releasing further research based on this index, including a comparison with various financial indices. To get access to this as early possible please sign up to one of our various subscription packages.
The last few months has seen a plethora of transparent pricing initiatives launched by the fine wine trade, helping traders and collectors make fully informed buying and selling decisions. The wine trade is reorganising itself along financial market lines with transparent buy (bid) and sell (offer) prices and an emphasis on charging commissions rather than making margin. This is a very welcome development and is very positive for the wine business.
The recent launches include:
Richard Dawes Fine Wine – now allows private customers to trade on live bids and offers from Liv-ex, with a transparent 10% commission.
Berry Brothers & Rudd – has announced it is launching a platform for customers to trade their private reserves with each other (10% commission).
Bordeaux Index – has launched ‘Live Trade’, publishing bid-offer spreads on 60 top wines and allowing registered customers to both buy and sell.
Fine & Rare Wines – provides an instant online valuation from its database of market prices and allows customers to offer wines for sale through F&R if they so wish (varying commission).
Vinfolio Marketplace (US-based) – launching next month, a platform allowing customers to trade their private reserves with each other (15-20% commission to the seller).
We are excited by these initiatives which are complimentary to Liv-ex’s trade-to-trade exchange model and we welcome any initiative that enhances transparency, believing it will only improve market volumes and increase the size of the market. As the largest marketplace for fine wine with a truly global membership (250 members across 22 countries and 4 continents) we are well placed to provide data and liquidity to these new merchant offerings.
In summary, the June report includes:
• Trading Activity – up 12% m-o-m
• Liv-ex 100 Fine Wine Index – up 0.3% in May
• Major Movers – Bordeaux 2006 starting to slide?
• Critical corner – Stephen Tanzer on '06 & '08
• Final Thought – Introducing the Liv-ex Fine Wine Investables Index
Login and findthe full report under the analysis menu.
Please note that if you are not subscribed to a Liv-ex Cellar Watch package you will not be able to view the full report.
View the Liv-ex Cellar Watch package options here.
You can also view a previous report here.
Liv-ex - The Fine Wine Exchange now has its own page on Wikipedia - the online encyclopedia. It wasn't us who wrote the page and we have no idea who did. (You can learn more about the process through which Wikipedia gets written here).
View the Liv-ex Wikipedia page
In typical Wikipedia fashion, there are a couple of inaccuracies and some of the details are already out of date, but we feel honoured to have been included none the less.
There is also a separate page on the Liv-ex Bordeaux Classification.
The hype around the latest vintage of Grange has been growing for some time, as this news story from earlier in the year shows.
It was finally launched in the UK last month - and it seems to have lived up to the hype.
The only major critic to have tasted it so far is Jancis Robinson, and she awarded it her highest ever score for the wine - 19.5. She described it as:
"Lifted and above all fresh! Wonderfully subtle and savoury and with a hint of cough medicine but wonderfully dry and thick and long on the palate... Wonderfully suave and really not like any other wine I can think of. At this stage not noticeably sweet.... Gago, like all those previously in charge of making Grange, insists that he has done nothing to change the style - in which case 2004 must be a particularly sophisticated vintage. So persistent! 14.3%"
Members of her excellent Purple Pages website are urged to read her full report on Grange 2004 and the rest of the Penfolds 'Luxury and icon range'.
Below is a comparison of previous Grange vintages, including scores from Robert Parker (RP, starred reviews are by Jay Miller), Jancis Robinson (JR) and the Wine Spectator (WS). The 'List Price' given is the lowest price available in the market for a 12x75cl case in good condition, excluding sales tax and duty.
The current Grange looks like it will soon become one of the most expensive ever, but at this level of quality it is perhaps also great value. Trading members of Liv-ex should be aware there is currently an active market in the wine. So please log on or call your broker to get involved.
The Liv-ex 100 Fine Wine Index is the industry's leading benchmark. The value of the index as of 31st May 2009 was 214.04, a rise of 0.3% on the previous month. The index is up 4.5% year to date, and down 17.2% year on year. To trade futures on the Liv-ex 100 visit Intrade.
With all the major chateaux having released (bar Petrus and Lafleur) we can now see how accurate the respondents to our 2008 Bordeaux En Primeur Survey were in predicting the release prices of our basket of ten wines.
The actual release prices for the ten wines totaled €1,006 ex-Bordeaux, some €144 euros (or 13%) more than our survey predicted. Overall, the wines were released 30% down in price on 2007.
The closest respondent - who works as a Senior Wine Advisor at a major UK fine wine merchant - was just €12 away, with a predicted basket price of €1,018. He wins a six pack of 2004 Haut Bailly for his efforts.
A table summarising the results is below:
