Most powerful fine wine brands: nos. 10-1

In the final part of the most powerful fine wine brands of 2016 as based on the Liv-ex Power 100 list in association with the drinks business, we count down from entries 10 to one.

The first part of this list spanning 20-11 can be read here and the entire article which first appeared in the December issue of the drinks business can be read here.

Below is a quick summary of Liv-ex’s methodology for the list:

To calculate the scores, Liv-ex took a list of all wines that traded on Liv-ex in the last year (from 1 September 2015 to 31 August 2016) and grouped these by brand.

It then identified brands that had traded at least three wines or vintages, and had a total trade value of at least £10,000.

Brands were ranked using four criteria:

• year-on-year price performance (based on the market price for a case of wine on 1 September 2015 with its market price on 31 August 2016);
• trading performance on Liv-ex (by value and volume);
• number of wines and vintages traded;
• average price of the wines in a brand.

Over 4,000 different wines/vintages were traded.

These were grouped into 670 brands, of which 199 qualified for the final calculation.

The individual rankings were combined with a weighting of 1 for each criteria, except trading performance which had a weighting of 1.5 (as it combined two criteria).

The final 100 brands accounted for 2,046 unique wines that traded, and from the 199 brands that qualified, there were 2,804 wines.

Cheval Blanc

Total score: 122 (rank 10 – down 2 places from 8 in 2015)
Value and volume trading performance score: 18
Value of trade on Liv-ex: 2.39% (rank 11)
Volume of trade on Liv-ex: 1% (rank 34)
Average trade price per case: £3,402 (rank 19)
Number of unique vintages traded: 25 (rank 24)
Price change: 16.59% (rank 52)

Although a much revered Right Bank estate, Cheval Blanc’s history on the secondary market has been occasionally patchy to say the least.

The troubles begin at en primeur. From 2005 to 2014, nine vintages (the 2006 onwards) produced negative returns of an average 17% for buyers according to Liv-ex.

Its average Wine Advocate score of 95.9 is above the average among the other wines on the Right Bank 50.

The estate’s high release pricing causes problems (at first) in the secondary market then there’s no doubting the quality of the wines. The 2006 was ranked by Neal Martin as one of the best wines of the vintage at a 10-year retrospective last year. Also, despite initial poor returns after en primeur Cheval Blanc has still seen a respectable price change of 16.59%.

Pavie

Total score: 116.5 (rank 9 – down 5 places from 4 in 2015)
Value and volume trading performance score: 13
Value of trade on Liv-ex: 2.13% (rank 14)
Volume of trade on Liv-ex: 1.47% (rank 19)
Average trade price per case: £2,054 (rank 39)
Number of unique vintages traded: 20 (rank 39)
Price change: 21.28% (rank 19)

A high scoring wine and also one of the more expensive in its Right Bank 100 peer group, Pavie is a wine aiming high and hitting its mark more often than not.

Since 2012 and its elevation to Grand Cru Classé A status, Pavie has advanced in lock step with fellow promotee, Angélus.

In fact, despite the significant increase in price, the estate continues to roll, its price change in 2016 placing it within the top 20.

The end of last year saw its 2003 and (freshly upgraded to 100 points) 2009 traded at new all time highs on the Liv-ex Exchange of £2,440 and £3,070 a case respectively.

Then, in January of this year the 2009 hit another high of £3,100, already an increase of 40.9% of where it was in January 2016 (£2,200).

Petrus

Total score: 113.5 (rank 8 – up 8 places from 16 in 2015)
Value and volume trading performance score: 37
Value of trade on Liv-ex: 4.45% (rank 6)
Volume of trade on Liv-ex: 0.37% (rank 72)
Average trade price per case: £17,216 (rank 3)
Number of unique vintages traded: 27 (rank 20)
Price change: 19.59% (rank 35)

‘The’ wine of the Right Bank and, along with Domaine de la Romanée-Conti, the king of the global auction market.

It’s also one of the most expensive wines on the market yet one that also sees a high number of vintages traded (27) and is one of the biggest labels traded by value on the Exchange (though significantly less in volume).

Despite a high average trade price per case, last August the weaker pound allowed several back vintages to hit new highs.

Between November 2015 and August 2016 the Petrus Index rose 12.7%, well above its parent Right Bank 50 index (up 8.6% over the same period).

The best performing wines were more of the ‘off-vintages’, which is to say the ‘cheaper’ ones (relative again).

The 2011 for example jumped 8% between June and August 2016 to a new trade high of £15,562 a dozen Using its price-over-points (POP) ratio, where a wine’s price is divided by a 20-point score to create a “loose” measure of value, Liv-ex has pointed out a few other Petrus vintages which might be of interest to buyers.

The 2008 for example with a Robert Parker score of 97 and a price of £18,000 per case, actually has the best (ie lowest) POP score of all Petrus vintages since 1999.

The 100-point 2009 and 2010 vintages arguably offer “relative value”. The 2010 has the fifth lowest POP score between 1999-2012 and at £25,500 a case is available at a 31% discount to the 97+ rated 2005, it is also still below its July 2011 peak of £26,204. (Prices as of August 2016)

Angélus

Total score: 98 (rank 7 – down 4 places from 3 in 2015)
Value and volume trading performance score: 22
Value of trade on Liv-ex: 1.28% (rank 18)
Volume of trade on Liv-ex: 0.83% (rank 37)
Average trade price per case: £2,201 (rank 37)
Number of unique vintages traded: 25 (rank 24)
Price change: 28.74% (rank 4)

Like Pavie, Angelus has lost a little ground over the course of 2016 more to the resurgent success of the big Left Bank châteaux than too many of its own failings.

Its price change in 2016 was one of the biggest of any estate and last August – like Petrus – in the wake of ‘Brexit’ it saw numerous vintages achieve new highs.

Having been given a boost by elevation to Cru Classé ‘A’ status in 2012, a slight dip in the Right Bank indices’ fortunes saw some of its big risers, like the 2009 and 2010, drop back a bit.

The weaker pound saw these vintages bounce back. The 2010 for example (with a recent elevation to 99+ Parker points under its belt) rose to £2,500 a case on the Exchange, 12% up from its position in April 2016 and a full 40% up from its nadir in June 2014.

The 2001 and 2004 vintages also set new personal highs and it is possible more wines could do likewise. The 100 Parker-point 2005 for example is still below its former peak of £3,700 a case.

Domaine de la Romanée-Conti

Total score: 91 (rank 6 – down 1 place from 5 in 2015)
Value and volume trading performance score: 56
Value of trade on Liv-ex: 2.17% (rank 13)
Volume of trade on Liv-ex: 0.17% (rank 115)
Average trade price per case: £18,141 (rank 1)
Number of unique vintages traded: 75 (rank 1)
Price change: 27.42% (rank 5)

The most expensive label on the list, although one that would be a lot more expensive if it only counted the domaine’s top wine, Romanée-Conti.

The leading fine wine on the international auction market, the headline-grabbing prices of Romanée-Conti nonetheless ignore the fact that, generally, its prices have been running roughly flat for the last five years.

The real movement in the DRC stable, comes from the (in comparison with Romanée-Conti) ‘far ‘cheaper’ labels such as La Tâche, which is of course another monopole, Richebourg and Grands Echézeaux.

Generally priced at and below £20,000 a case they represent not only exceptional quality but with room to appreciate as well. One can be sure collectors have cottoned on, with 75 vintages traded on the Exchange (the most on the Power list), the full breadth of DRC’s stable is clearly being exploited.

Latour

Total score: 77.5 (rank 5 – up 8 places from 13 in 2015)
Value and volume trading performance score: 7
Value of trade on Liv-ex: 5.48% (rank 4)
Volume of trade on Liv-ex: 2.16% (rank 10)
Average trade price per case: £2,977 (rank 24)
Number of unique vintages traded: 44 (rank 7)
Price change: 19.54% (rank 36)

And so to the final five. Previously one of the most powerful of the first growth labels, one has to wonder if Latour’s withdrawal from en primeur has led to its being overshadowed by the other four.

Certainly, its annual ex-cellar releases have failed to become the sort of event many might have hoped. It has been noticeable that the high premium initially demanded by the estate has been lowered and even done away with in the last couple of years. Even so, the release in September last year of the 2007 at market price was still judged to be a “damp squib” by UK merchants.

Once wines that have yet to see the light of day begin to emerge however, the interest around the Pauillac estate is likely to grow once again.

Consistently well scored (with an average 96 WA points) the average trade price per case hides the fact that Latour has the highest average bottle price of the first growths €583 p/b. Even it has withdrawn from the spotlight of en primeur, it hasn’t drifted so far from memory that it isn’t one of the most widely traded fine wines on the Exchange.

Haut-Brion

Total score: 148 (rank 4 – down 2 places from 2 in 2015)
Value and volume trading performance score: 5
Value of trade on Liv-ex: 6.34% (rank 3)
Volume of trade on Liv-ex: 3.04% (rank 9)
Average trade price per case: £2,951 (rank 25)
Number of unique vintages traded: 48 (rank 4)
Price change: 19.43% (rank 37)

This first growth has soared into the limelight in recent years, with the highest average score of all the first growths (97) and for vintages that are not as expensive as their first growth cousins.

Admittedly Haut-Brion stepped back a little in 2016 after hitting a second-place entry on the list in 2015 but its performance is still impressive.

It has the third best performance of trade by value on the Exchange and is in the top 10 for volume too, thanks to the wide number of its vintages being traded.

Margaux

Total score: 56.5 (rank 3 – up 3 places from 6 in 2015)
Value and volume trading performance score: 9
Value of trade on Liv-ex: 4.70% (rank 5)
Volume of trade on Liv-ex: 2.42% (rank 11)
Average trade price per case: £2,754 (rank 28)
Number of unique vintages traded: 46 (rank 5)
Price change: 24.32% (rank 10)

Another first growth that has come out of the shadows of late. Margaux’s resurgence started with an ex-cellar sale in New York at the end of 2015 that was wildly successful but the start of 2016 was marked by the tragic loss of long-standing technical director, Paul Pontallier.

This sad start to the year was counterbalanced by the news that Pontallier’s last wine, the 2015, was perhaps the best wine of the vintage and indeed Liv-ex’s global members voted it so last April.

It would be wrong to say that Margaux’s success was in any part due to a sense of sympathy for Pontallier’s loss. Perhaps, rather, his death once again threw the spotlight on this first growth and reminded a great many people how good and how consistent it has been under his guidance.

It is a legacy his successor, Philippe Bascaules, will hopefully continue.

Mouton Rothschild

Total score: 42.5 (rank 2 – down 1 place from 1 in 2015)
Value and volume trading performance score: 3
Value of trade on Liv-ex: 7.88% (rank 2)
Volume of trade on Liv-ex: 3.43% (rank 8)
Average trade price per case: £3,258 (rank 21)
Number of unique vintages traded: 41 (rank 9)
Price change: 24.70% (rank 8)

Last year’s top placed label has gone down a spot in 2016 but, like Haut-Brion, this shouldn’t mask an otherwise excellent performance.

Mouton was the second most traded wine by value, over 800 cases of wine traded on the Exchange and it saw a price change of close to 25%.

The 2006 and 2008 vintages were two of the top wines traded by value last year and Petit Mouton, the second wine, is one of the best-performing of those labels.

Mouton is no longer the ‘fifth’ first growth by any means.

Lafite

Total score: 32.5 (rank 1 – up 10 places from 11 in 2015)
Value and volume trading performance score: 1
Value of trade on Liv-ex: 11.14% (rank 1)
Volume of trade on Liv-ex: 4.20% (rank 6)
Average trade price per case: £3,757 (rank 17)
Number of unique vintages traded: 50 (rank 2)
Price change: 23.82% (rank 12)

Lafite is back atop the pile of the most powerful fine wines for the first time since 2010. In fact, it’s the first time since 2010 that all the first growths have occupied the top five spots on this list.

From boom to bust to boom again, Lafite’s turnaround is remarkable. Its price premium may be falling against its fellow firsts but this is, in part, a testimony to how far Lafite’s prices have fallen since the market peak in 2011 – and is one of the key’s to this label’s return to form.

The château’s 2010 vintage was the most traded wine by value last year, followed by the 2014 vintage of its second label, Carruades de Lafite. The 2009 was also one of the most traded.

The ball has kept on rolling into this year as well. This week two vintages of Lafite hit new all-time highs according to Liv-ex.

The 2012 traded at £4,390 a case, an increase of 40.3% on its trade price a year ago, while the 2014 hit a new high of £4,134 as it awaits physical release.

If wines are hitting new peaks however, many wines remain off their former 2011 highs. Liv-ex pointed out that the 2005, 2008, 2009 and 2010, despite their positive performance in general last year are all well below where they stood at the height of the market.

If the strong performance of the fine wine market continues will we see Lafite back in the number one spot at the end of the year?