Burgundy fine wine prices get a reality check, says Liv-ex

Falling prices for Burgundy’s top wines in the last year have highlighted vulnerability in the market, but there are reasons to be positive, says a new report by Liv-ex.

Meteoric price rises for famous Burgundy fine wines have been a dominant theme of the secondary market in recent years.

But 2019 saw prices stutter for some top names, including several Domaine de la Romanée-Conti wines, said Liv-ex in its annual Burgundy market report.

The ‘Burgundy 150’, which tracks prices for the most actively traded wines on the Liv-ex platform, was the group’s worst performing regional index in 2019, falling by 8.8% in value.

‘The past year has highlighted the vulnerability of Burgundy’s high prices,’ said the Liv-ex report, which coincides with the Burgundy 2018 en primeur campaign in the UK.

However, Liv-ex analysts said it was too soon to know whether this will develop into a longer-term trend.

‘The [overall] fine wine market has entered 2020 with many headwinds still at play, and many questions still unanswered.’

For context, the Burgundy 150 index has risen by 445% in the last 16 years, although a significant growth spurt took places between 2016 and 2018.

That compares to a 202% increase for the benchmark Liv-ex 100 index since 2003, and a rise of 235% for the Liv-ex 50, which covers the five Bordeaux first growths – Lafite, Mouton Rothschild, Margaux, Latour and Haut-Brion.

Record share of trades for Burgundy

Liv-ex said a drift in prices principally concerned the top-tier Burgundy wines and that, alongside this drop, it saw a 48% increase in the number of Burgundy wines traded on its platform in 2019.

Greater numbers of collectors appear to have sought out less expensive wines that may hold promise for the future, including several wineries with young winemakers at the helm.

As a result, Burgundy took a 20% share of trades on Liv-ex by value in 2019, a record total for the region and a reminder that the days of Bordeaux commanding more than 90% of fine wine market trades appear to be over.

That said, Liv-ex analysts said liquidity was an issue for Burgundy wines.

‘One of the challenges the Burgundy market faced in 2019 was finding the bid. In the upswing of 2016 to 2018, the value of bids far outweighed that of offers. 2019 saw a reverse,’ analysts said.