Talking trade – Bid and offer exposure reaches all time high

Liv-ex bid (£30m) and offer (£50m) exposure reached an all-time high this week (£80m). Live bids and offers have increased 27% and 14% year-to-date respectively. Despite the headwinds of 2020, wine merchants, collectors, and retailers have all shown their adaptability in these times.

Much like the consumer has turned to the world wide web for their fulfilment of wine, businesses have too. Trade automation, which allows Liv-ex bids and offers to be matched around the clock by wholesalers the world over, reached an all-time high in October.

White Burgundy (7.9%) helped drive trade for the region as a whole (Burgundy 28.8%) this week, setting a new all-time high in market share terms. Raveneau, Bonneau du Martray, Pierre Yves Colin Morey, d’Auvenay, Leflaive, Drouhin and Fontaine Gagnard all saw action. (Someone will be drinking well this Christmas).

Champagne (8.3%) too had a solid week, while Italy (14.2%), Rhone (2.3%), USA (6.5%) and Others (2.9%) all drifted.

Bordeaux dominated the bigger deals this week. Two First Growths, Chateau Lafite Rothschild 2006 and Chateau Mouton Rothschild 2010 both saw decent volumes change hands at small discounts to the market. First Growth trade made up 44% of Bordeaux trade by value. Last week First Growths accounted for 32%. YTD the Liv-ex 50 is up 2.75%.

Chateau Duhart-Milon Pauillac 2010 traded at £803 per 12×75. In 2011, the wine released at £1000 per 12×75 and soon after was trading at a 20% premium. In the following year however, the wine began to drift as the heat was taken out of the Bordeaux market. It soon settled at a 30% discount to release. The lowest price paid was in June 2014 (£454). The wine has since risen 76.9% to reach its highest trade price in the last eight years. Neal Martin recently scored the wine 93 describing it as “excellent.”

Finding ‘Fair Value’ in Bordeaux

Liv-ex’s ‘Fair Value’ methodology represents a useful approach to pricing wines. It uses regression analysis to measure the relationship between price and quality (critic score). Silver members and above have access to the Bordeaux analysis tool which charts your choice of critic scores against Liv-ex Market Prices.

Extended Report – The Rhone: Solid as a Rock

Our latest report, The Rhone: Solid as a Rock, which examines the market for Rhone wines, has now been published. This report is available exclusively to Liv-ex members.