Wine market calming down after record year

After 12 months of record growth, a sense of equilibrium has entered the wine market according to the latest report from wine merchant Bordeaux Index.

With investors taking a bit of a break, prices in the market’s most popular wines rose only 0.8% compared to the rallies enjoyed by the equity and gold markets, which posted hearty returns of 7% and 5% respectively.
 
Despite September traditionally being one of the quietest times in the industry’s calendar, monthly turnover was up a boisterous 10% from a year ago as the market continued to benefit from strong demand from both private clients and professional investors.
 
“A settling of prices is pretty rational and is to be expected – no market goes up five percent a month forever,” said Bordeaux Index managing director Gary Boom.
 
“It’s been such a dynamic market over the last 12 months, with prices rising on average 31%. While we’re not expecting that pattern to continue the fundamentals are still there for solid, respectable returns.
 
“Structurally the supply side is still very restricted and for the top wines, it’s still a seller’s market. And despite September’s small headline rate, wine is still outperforming gold – and particularly shares – so far this year.”
 
In the narrow set of wines for which prices rose, contemporary vintages of chatéaux Lafite and Margaux benefited particularly as demand from Asia began to show encouraging signs of diversifying.
 
Despite the relatively small headline figure, the industry is still being kept busy with trade in the 2008 and 2009 Bordeaux vintages.
 
While prices for the top 2009 vintages continue to settle, trade remains brisk for the best parcels of the 2008s.
 
“We will review the top 2008s for inclusion in the index as they become physical over the next few months,” said Boom. “With another small and very high quality vintage seemingly on the cards for 2010, some of them may prove to be excellent value.”

Alan Lodge, 07.10.2010