Bordeaux prices continue to soar

2010 proved a record year for fine wine as claret prices reached new highs and sales through auction houses breached the £260 million mark, led by Hong Kong which, by December, had beaten the US to top spot as the world’s most valuable auction market.

Reflecting the demand for Bordeaux’s leading labels in the Far East, the Liv-ex Fine Wine 50 rose almost 60% to break through the 400 point barrier by the end of last year (it was based at 100 in January 2004), while global sales of fine wine through the leading auction houses almost doubled in 2010, with Hong Kong accounting for almost a third of sales.

As much as £106m worth of wines went under the hammer in Hong Kong, 157% more than 2009, compared to North America’s £99m, up on 2009, but still below its 2008 peak of over £100m.

Although more lots of wine were sold in the US, high prices paid in the Far East explained Hong Kong’s lead by value, with an average price per lot of $9,700 compared to $3,600 in America.

Speaking of the market, James Miles, director of Liv-ex, said: “Wine continues to outperform other assets, and in 2010 it outshone even gold. Indeed, over the last 10 years, fine wine has proved itself as a credible asset class in its own right, delivering a compound annual return of 12.5%.”

Meanwhile, fine wine merchant Bordeaux Index reported gains of more than 32% during last year for its own index of the top 100 most traded labels, although growth during the month of December at just 1% lagged behind other assets such as shares (up 6.7%), gold, (up 2%) and oil (up 8.7%).

However, turning to 2011, the company’s managing director Gary Boom said that the Bordeaux Index order book was “groaning” in the first full trading day of the year.

"With another first class en primeur vintage waiting in the wings, buyers are already acquiring positions in the most desirable back vintages in advance of the new release," he explained.

"You’ve also got to factor in customary large outgoings that will accompany next month’s Chinese New Year. Given these dynamics, our expectations are that prices will continue to climb through the first quarter,” Boom concluded.

Patrick Schmitt, 06.01.2011