Talking Trade – Italy trade share hits another record high

Regional share of trade by value (17th April - 23rd April)

Much can be said about the recent performance of Italy as a region – in Q1 a Barolo was the top traded wine on Liv-ex, the Italy 100 was the best performing sub index and Sassicaia 2009 had the greatest return. Combined, these stats would suggest that Italy is on a winning streak so far this year. Furthermore, Italy’s trade share reached 27.7% for the week – a new record for the region.

Historically, Italy’s rising share has been at the expense of Bordeaux (52.7%). However, this week, the rescoring of the Bordeaux 2010 vintage by Neal Martin brought attention back to the region, and the 2010s were the most traded Bordeaux vintage, far outpacing the usual performers: 2009, 2015 and 2016.

The remaining regions combined for just a quarter of total trade, with the largest being Burgundy at 7.4%.

Top 5: share of trade by value (17th April - 23rd April)

Latour 2010 led trade by value this week. Neal Martin awarded the wine 100 points in his rescoring of the vintage. Following a series of upgrades and downgrades, seen below, his most-recent note described the wine as “The King” and Martin reported that “if I had space for only one 2010 in my cellar it would be Latour”.

In 2011, Neal Martin scored the wine a barrel range of 96-98. During his first in-bottle tasting he upgraded it to 100 points, saying “this will rank alongside legends”, leading to a 20% price increase. Upon re-visitation of the wine in 2014, he downgraded it to 98+. At that time, the market price had drifted 20% from its high, but still had 10% further to go before hitting a low in January 2016.

What goes down, sometimes goes up and the next few years the wine’s price began to rise with the broader market, but the reaffirmation of 98+ in 2018 was followed by a drift in price. Today, the wine remains at a 5% discount to its ex-London release price of £11,000 per 12×75 in 2011.

Fine Wine records: but at what price

Geopolitical uncertainty, 25% tariffs on European wines, and the latest dislocation caused by Covid-19 have all weighed heavily upon sentiment in the fine wine market. Nonetheless, trade has endured – at record levels (Fine wine goes digital), but something had to give.

Trade Automation

This week included the second highest day of trades on record, spurred on by an increase in trade automation. Looking for tech solutions in trade was Tip #5 in our recent guide to successfully navigating of these unsettling times and it appears to be helping.