Time to look at the first growths again?

With Bordeaux prices still approaching a nadir, are the first growths back to competitive, attractive prices?

The rise and fall of the Bordeaux market between 2009-11 is well-known, as is the broadening of the market that accompanied it.

Leading the Bordeaux plunge were the five first growths whose decline between 2011 and January of this year is 32% although it was more severe a few years ago before a few price rallies throughout 2015.

Liv-ex has considered the average case prices of five wines from each of the first growths from January 2011 to January of this year and compared them to wines from other regions that might reasonably be considered ‘first growths’ – although it has excluded Domaine de Romanée-Conti’s Romanée-Conti from its calculations as its prices are so high that it distorts the average too much.

What’s clear from the comparison is that at the bottom end little has changed, prices have declined here and there and risen too – the Rhône’s rise of 8% on average is surprising for a category whose performance has been so poor of late.

Equally surprising is the spot taken by Spain’s fine wines, the supposed underdog of the secondary market taking fourth place in both 2011 and 2016 but, it should be noted, only on the basis of two estates.

It is the top three positions where there has been a dramatic turnaround.

In 2011, with an average case costing £6,036, the first growths were very much on top, followed by the US and then Burgundy, a case of one of the top domains costing just under £5,000 five years ago.

Today, it is Burgundy that sits atop the average case price tree. A case of a Bordeaux first growth now costs a little over £4,000 and, for the first time, cost less than the leading wines of the US which have been rising to an average of £7,508 a case. This unique – and potentially volatile – situation has been covered before by the drinks business here.

Meanwhile, the rise of Burgundy, driven like those of the US by demand and lack of supply, has seen the average case prices of its top wines rise to £7,568.

The problem with Burgundy is that while prices have risen they have, in many cases, begun to stall and as ‘the price of rarity’ increasingly leaves the wines out of the reach of many buyers one can increasingly see how the wheel might be turning or even has turned full circle.

Buyers bailed from Bordeaux in 2011 on the basis the wines were too expensive. Burgundy and the US work in slightly different ways to Bordeaux and buyers may not exactly begin abandoning them as categories but suddenly top claret is looking affordable again.

It seems as though this has been noted. Bordeaux led the secondary market as it registered a strong 1% rise in January of this year. It’s happened before of course, only for en primeur campaigns to bring all hopes down in flames.

It will no doubt be a few more months before a stronger trend in this direction emerges.