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Friday 31 October 2014

Was Parker right about first growth pricing?

17th July, 2014 by Rupert Millar

Liv-ex considered a statement made by Robert Parker 10 years ago about first growth pricing and has found him to be largely correct.

The five Bordeaux first growthsIn the 2004 September issue of Food & Wine Magazine, Parker wrote that while Americans may “scream bloody murder” when considering the prices of the 2003 vintage, he went on to say: “If my instincts are correct, 10 years from now a great vintage of these first growths will cost over US$10,000 a case…at the minimum.”

As Liv-ex noted on its blog, “Parker’s instincts were largely correct”. By the peak of the market in 2011, all of the 2003 first growths had passed the $10,000 a case mark, with Lafite and Latour having done so in 2009 – helped by both being 100-pointers.

Liv-ex therefore lined up the “great” Bordeaux vintages that were around in 2004; 1982, 1990, 1996, 2000 and 2003.

Even with the “violent correction” in first growth pricing since then, Liv-ex pointed out that of the 25 wines from those five vintages, 13 are still above $10,000 a case however tentatively.

The 1982 vintage is the strongest, with all first growths well above $10k a case while all of the 2000s are still above that mark except for Haut-Brion.

Lafite is a strong performer still despite the recent pricing body-blows, all of its wines from the five vintages are above $10k except the 1990 which is down to $9,400.

Parker’s assertion that the growing demand for the wines and their finite quantity would boost prices is certainly applicable to 1982’s success and the 2000s too.

Since 2004 of course there have been other “great” vintages so how have they fared in line with Parker’s prediction?

Liv-ex noted that the 2009s and 2010s have an average price of $10,340 per case but they were priced far, far above “normal” vintage releases and have been declining rapidly since then, whether they stay above the $10,000 mark much longer is questionable.

In fact, the 2009 and 2010s from Mouton, Margaux and Haut-Brion are all beneath $10,000 a case, with Latour’s 2009 in particular providing the ballast to keep the average up.

Another “great” vintage that has suffered since 2011 is the 2005, Latour is just under $10,000 a case, Lafite only just over, Mouton quite a bit under, Margaux too and so too Haut-Brion.

So perhaps anything after 2003 is still not sufficiently old enough to be considered rare or hard to find – the 2005, 2009 and 2010 vintages were not small after all. As such they will likely continue to suffer from the on-going decline in the market until a greater gap between their respective harvests opens up.

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