The 2018 Liv-ex Power 100 – analysis

Burgundy leads this year’s Liv-ex Power 100, with Domaine Leroy taking the top spot. But there are many risers and fallers in the listings, with wines from Italy and Champagne making their presence felt. Rupert Millar examines the rankings and explains what it means for producers and buyers.

Hip hop star DJ Khaled is a (surprising) factor behind the rise of one Burgundy label this year
Hip hop star DJ Khaled is a (surprising) factor behind the rise of one Burgundy label this year

As I was preparing to write this feature, there emanated from the bowels of the internet the most deliciously scurrilous, shocking, stop press-inducing rumour that LVMH was on the brink of buying one of Burgundy’s most esteemed estates, Domaine Leroy.

Only, it wasn’t the case. Fake news, how apt. Yet the talk was pertinent nonetheless. For a start, the impressive, tough yet mercurial Lalou Bize-Leroy is now in her mid-eighties, and any succession plan – if there is one – is only known by a very select few.

It’s also a symptom of the demand for great Burgundy that exists among wealthy companies and consumers.

In October, a single bottle of Domaine de la Romanée-Conti’s 1945 Romanée-Conti sold in New York for more than US$500,000 (£390,456). Earlier that month, the Bouygues brothers, Martin and Olivier, owners of Château Montrose, hot from their acquisition of Clos Rougeard, became ‘partners’ with the de Surrel family by buying into the Gevrey-Chambertin estate Domaine Rebourseau; bringing with them money, expertise and no doubt the best broadband connection in the Côte d’Or, given that the Bouygues family’s main business is in telecommunications.

Think of the other estates snapped up by international billionaires recently. From 2014 to last year, Domaine des Lambrays, Bonneau du Martray, Clos de Tart and Jayer-Gilles have all been bought by, respectively, LVMH, Stanley Kroenke, François Pinault’s Artemis Group and André Hoffmann.

Burgundy is the hot ticket at the moment and it’s not beyond the realms of possibility that should Domaine Leroy go up for sale in the not too distant future, it will excite a bidding war to end all bidding wars.

With the Moueix family having sold a 20% stake in Petrus in September for a reported €200 million (£178m), with the entire 11.4-hectare estate valued at €1 billion, how much would a 21ha estate in Vosne-Romanée, Gevrey-Chambertin, Corton Charlemagne, and a thriving négociant business go for?

But what made the false rumour even more pertinent was the fact that the top wine in this year’s Power 100 list is… Maison & Domaine Leroy.

In part, this is unsurprising. Those who read last year’s results will find that many of the same themes have carried over into 2018: the rise of Burgundy and a general broadening of the market to accommodate a spread of fine wines, largely at the expense of Bordeaux.

Before digging into the minutiae of regional and brand performance, let’s consider the market from a bird’s-eye view.

Feature findings

> The 2018 Power 100 carries on largely where 2017 left off, with Burgundy continuing to dominate and the market broadening largely at the expense of Bordeaux.
> Demonstrating how the market is becoming more diverse, the number of brands that qualified for consideration this year rose from 220 to 248, and the number of wines traded was up from 4,000 to 5,700.
> Although Bordeaux is running somewhat flat, most of its top brands, such as the first growths, are not suffering, and many new brands are on their way up as their value and quality is recognised.
> Champagne, Italy and the US are three other dynamic areas going through the gears. The Rhône continues to plod along, and there’s steady progress in Port.

The market has, indeed, broadened considerably since last year. Pinned at more than 4,000 wines from 750 brands last year, in 2018 this rose to 5,700 wines from 953 producers, with an additional 28 qualifying for possible inclusion on the list (see methodology on page 50).

Within that, Burgundy continues to grow. Domaine de la Romanée-Conti naturally tops the chart of the most expensive wines, with another seven Burgundians in the top 20. Of the 20 best brands by price performance, 14 are from Burgundy, and among the top 20 brands that have risen furthest up the chart since last year, there are 11 wines from the Côte d’Or.

Other regions on the move are Champagne and Italy. Five Italian labels were among the biggest risers and one Champagne, but the odd label shows up in marques heading downwards as well. Either way, both have more labels in the list this year than they did in 2017.

And what of that great mainstay of the fine wine world, Bordeaux? The number of labels on the list continues to decline, down from 53 in 2017 to 45 this year. Nineteen new labels did qualify for entry onto the list but none of them ended up in the top 100, and eight labels from last year dropped out. Bordeaux brands in the top 100 also dominated the top fallers, with 12 wines seeing their 2017 ranking severely eroded.

Just one label, Carmes de Haut-Brion, showed up in the list of top 20 price performers, though it’s still not in the top 100. But the first growths and the Pomerol heavyweights of Le Pin and Petrus continue to put in strong showings in terms of pricing, and the number of wines traded and other claret brands are on their way up.

Furthermore, as Liv-ex director Justin Gibbs explained, while it might appear that brands losing ground are those seeing some sort of decline, “it’s more that other big brands are on the move and have pushed them out”.

Referring to Bordeaux more particularly, he adds: “It’s not declining. Prices aren’t up as much as Burgundy wines.”

Bordeaux has lots of wine to trade, and still dominates the amount traded by volume, but it’s price performance that is dragging it down.

As an example, Gibbs points out that at the height of the market, in 2010-2011, the top five wines were the first growths, “because the volumes were mega and prices were high – £8,000 a case on average, now it’s £4,000.”

How the mighty have fallen but see how the market lifts others up in their place.

READ MORE: The 2017 Power 100

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