During the past 14 months I have mentioned (wherever possible) the potential of right bank properties ‘soaking-up’ the value in the Bordeaux market. The apparent opportunities were amplified after confirmation of the latest St Emilion Classification where Chateau Angelus and Chateau Pavie received their promotion to Classe A in the rankings – giving them the same classification as the esteemed Chateau Cheval Blanc and Chateau Ausone.
The ‘gap’ in value – offered investors huge potential to make short term gains in a market that should normally be viewed as a long term horizon for steady growth. Whilst the ‘gap’ has closed – there is still room for growth.
The upsurge in trading for these two brands; Chateaux Pavie and Chataeu Angelus, has propelled them to 1st and 2nd place (respectively) the Liv-ex Power 100 (published by the London International Vintners Exchange and The Drinks Business) – an annual list of the most powerful (traded) brands from the fine wine market.
Whilst Chateau Pavie climbed 2 places from its 2012 position to take the No.1 spot, Chateau Angelus managed to climb 21 places to 2nd position in the 2013 listing.
Despite this recognition, the signs have been there for some time. After the promotion to Classe A – Pavie’s owner, Gerard Perse suggested “The move up to A will no doubt increase the value”. His wife, Chantel Perse, justified the hike in the price of their 2012 En Primeur release “we increased our price by around 58% – to reflect our new classification. If we hadn’t done it, it would have been ridiculous”, so much was her confidence in their decision that she stated, “I believe it’s important to define the difference between the classifications”.
‘Right Bank’ wines from the Bordeaux region now dominate the top 6 places in this year’s Power 100 list. This is testament to the change of direction the market has taken in the past 12 months. Last year’s top spot DRC has shown signs of falling from grace over the past 6 months, however similar to Bordeaux, there is still plenty of interest in Burgundy with seven brands from this region joining the list. Chateau Lafite and Chateau Latour, down to price performance have slid to 18th and 15th place respectively, whilst under-valued Chateau Haut Brion has pushed up 6 places to 6th on the list.
Whilst slight changes were made to method in which Liv-ex calculated the results (see below notes from Liv-ex), the List (in our opinion) does present an interesting view on how the trading environment of the fine wine market is shifting (for now), and which wines are in demand – and which wines are not!
Liv-ex Power 100 methodology notes (Source: Liv-ex.com)
“This year we changed our methodology slightly to better reflect the market. We have grouped wines together as brands (e.g. Carruades de Lafite is incorporated with Lafite Rothschild under brand Lafite) and have placed more emphasis on secondary market trades.
Our starting point was to take a list of all wines that traded on Liv-ex in the last year and group these by brand. We then removed all those that had traded lightly. Brands were ranked using five criteria: year on year price performance, average critic score (we used Robert Parker’s scores where possible, and where none were available we used The Wine Spectator, Allen Meadows, Stephen Tanzer and James Suckling), trading performance on Liv-ex, number of wines and vintages traded, and average price. Only the wines and vintages that traded on Liv-ex in the last year were included in the calculations.
The individual rankings were then combined with a weighting of 1 for each criteria, except trading performance which had a weighting of 1.5 (as it combined two criteria). The final 100 brands accounted for over 1600 unique wines/vintages traded in the past year.”