Bordeaux '17 Pricing Causes Backlog Of Vino Stocks, Liv-Ex Says

From Bloomberg, July 8:

• Margins squeezed for Bordeaux merchants buying vino futures
• Bordeaux 2017 vintage hitting past times worst frosts inwards quarter century

High prices for Bordeaux 2017 compared amongst like prior vintages, as well as restrained demand from buyers focusing on a few peak labels, is leading to vino stocks backing upwards at merchants inwards the French port as well as a squash on margins through the furnish chain, according to London-based online vino marketplace Liv-ex.

Average 2017 prices for wines inwards the Liv-ex Bordeaux 500 Fine Wine Index, comprising the final 10 physically-available vintages from l peak vino estates, were downwardly only 11.5 per centum from the higher character 2016 vintage. The average 2017 cost inwards the index was 124 euros ($146) a bottle inwards bond, alone two euros cheaper than the to a greater extent than critically-acclaimed 2015 vintage as well as most xx per centum to a greater extent than than Liv-ex’s suggested fair-value level. The 2017 flavour was marked inwards only about regions past times the worst limit frosts inwards a quarter century.

“Throughout the displace Liv-ex stated that many wines looked unattractive because they were priced amongst a premium to fair value as well as higher upwards vintages of comparable quality,’’ Liv-ex said inwards a review of the 2017 sales campaign.

Liv-ex said estates should benchmark vino futures against a broader handbasket of dorsum vintages as well as cost according to a fair-value analysis to encourage buyers as well as teach out to a greater extent than reach for margins inwards the furnish chain. Wine futures, or en primeur wines equally they are known, are sold past times producers inwards the limit next the harvest piece they are nonetheless maturing inwards barrels, as well as are non physically delivered until to a greater extent than than a yr later.

“Chateaux are protected from marketplace forces past times the negociants who marketplace as well as distribute their wines for them,’’ Liv-ex said. “In the brusk term the negociants are left inwards the precarious set of asset stock that the marketplace currently believes to last overpriced.’’

“In club to sell this they must either hold back to discount or rely on the marketplace to alternative upwards inwards the future,’’ Liv-ex said. “Many volition promise for the latter, but alone those amongst the deepest pockets tin give notice play this game. In the long term chateaux withholding stock volition demand to nowadays themselves to a greater extent than thoroughly amongst the secondary market. Without robust as well as gradual cost appreciation, the strategy they are gambling on volition non succeed.’’...MORE