'Heterogeneous' Bordeaux 2017 restores confidence

London

THE 2017 vintage from leading Bordeaux wine estates, due to be presented to global merchants in the region this week, is looking "heterogeneous" following a combination of spring frosts in some areas and an otherwise relatively good growing season, according to a report from the London-based online wine market Liv-ex.

Demand for Bordeaux en primeur futures, the system by which wine is sold to merchants and customers while still maturing in barrels before physical delivery, has been under pressure due to volatile prices and a run of mediocre or poor vintages between 2011 and 2013.

A price rally over the past two years, combined with critical acclaim for the 2015 and 2016 vintages, has helped to restore buyer confidence.

"The general mood around en primeur has improved from the nadir of 2013," Liv-ex said in its Navigating Bordeaux 2017 report. "Returns from recent campaigns have been mostly positive, potentially helping to rebuild confidence in the system."

Liv-ex noted that the vintage is coming on sale at a time when Bordeaux's market share has been dropping, while other areas such as Burgundy and northern Italy have seen demand growing.

Liv-ex data show that last year, Bordeaux's market share fell to 68 per cent of overall trade by value compared with 96 per cent in 2010, while the share of the top first-growth estates has also dropped within that total.

Liv-ex also noted that many top estates tended over the past two years to hold back an increasing proportion of their output for sale after the initial en primeur stock release.

"On the one hand, it may be simply part of a normal restocking cycle," Liv-ex said. "On the other, it is possible that the strategy of restricting supply is intended to help maintain price levels."

Liv-ex said that 2017 was positive for the fine wine market overall, with the Fine Wine 1000 Index, the broadest measure of the market, climbing 11 per cent. BLOOMBERG