2015 Fine Wine Predictions: Bordeaux (2/2)

2014-12-17

Anticipating buying opportunities

The subdued state of the Bordeaux market offers buying opportunities, such as First Growths from 1996 and right bank wines from 1998 – superb vintages that are coming into an early stage of their long maturity phase. Because of this demand ought to pick up. 1996 in particular looks fair value following declines of 40%, with the exception of Lafite which still commands a premium.

Volatility creates buying opportunities in any market, and wine is no different. When sentiment is negative, markets will tend to overshoot as they readjust. In wine, the very greatest vintages, comprising wines that are most susceptible to high prices at release, are often those that are sold off the hardest.

One such vintage that has been sold down over the last 3 years and yet which is one of the ‘greats’ is 2005. Whether the market has yet hit bottom is hard to judge. What is sure is that 2005 is the next great vintage following 1996 and 2000 that has a huge drinking window.

2005 may have been under-rated by key critics relative to 2009/2010. The likelihood of this vintage seeing improved ratings is greater than a downside, and any broad-based re-rating of them as they start to show their true class will spur price rises. Spring 2015 could well be the turning point for this vintage.

Back vintages of right bank Bordeaux have started to pick up, with the top of the market leading the way. This may have a positive effect on the peer group of right bank, merlot-dominated top wines. Typically production volumes are much lower than the big Medoc (left bank) estates, and scarcity exerts a greater influence on market pricing of older vintages.

This is an extract of our report 2015 FINE WINE PREDICTIONS