Liv-ex chairman and CEO James Miles drew attention to ‘some sharp falls’ on Burgundy grand cru transaction prices on the group’s global marketplace for the trade, describing the trend on Twitter as a sign of a ‘correction long overdue’.
Liv-ex’s Burgundy 150 index, which represents one indicator of market performance and features mostly grand cru labels, fell in value by 8.3% in the first six months of 2023. Some wines in the index have fallen by more than 20%.
Other regional indices within the broad Liv-ex 1000 index have also dipped since January, as the chart below shows.
Credit: Liv-ex.
Liv-ex’s Burgundy 150 was still up by nearly 68% over five years, however, offering a reminder of the extent to which prices for blue-chip producers’ top wines have soared in the recent past.
Robbie Stevens, a senior broker at Liv-ex, said the Burgundy 150 was down by around 10% since hitting its latest peak in October 2022. Some top-tier wines in the index were down 25 – 30%, while others have fallen much less sharply, by up to 5%, he said.
He highlighted Armand Rousseau, Chambertin 2020 as one example. Two transactions on Liv-ex this week each saw a single 75cl bottle trade at £2,750 (in bond), he said, whereas a six-bottle case traded at £24,000 back in April, equivalent to £4,000-a-bottle.
‘We might expect to see a 10% premium for the case value [versus a loose bottle], but we’re still talking about something in the region of a 25% reduction [in price],’ Stevens said.
He said it was a similar story for other, top-tier Burgundy grand cru wines from the 2019 and 2020 vintages, which have in some instances been more expensive than well-regarded vintages with more than a decade of bottle ageing.
He added there was also a sense of the Burgundy market cooling off after running hot for several years.
Some merchants still expect prices for top-tier Burgundy producers’ wines to rise further over the long-term, due to the ongoing dynamic of tight supplies and expanded global demand from wealthy collectors.
‘History tells us that’s a logical way to think, but it doesn’t take away from the fact that [on] the market at this moment in time, the prices are coming down,’ said Stevens.
Given the wine market has tended to be cyclical, though, he said a key question is: ‘at what point do these things start to become “a buy” again?’.
Buyer caution has been a theme on the fine wine market in general this year, possibly underpinned by higher living costs and macroeconomic uncertainty.
Matthew O’Connell, CEO of the LiveTrade online trading platform at Bordeaux Index, told Decanter magazine’s Market Watch earlier this month, ‘Prices are not really much softer, there’s just very little activity [on the market].’
In June, though, US-based auction house Zachys reported strong demand for rare Bordeaux, Burgundy and Champagne.