Wines from Burgundy and Italy are taking an increasing share of the fine wine market as connoisseurs look for value outside the Bordeaux region of France.
The market share of Burgundy has climbed from 1.2 per cent in 2010 to 6.8 per cent in 2013, according to Liv-ex, an exchange for fine wines. Italian wines have also made inroads, moving up from 0.9 per cent of the market to 3.3 per cent.
“The consumer, be it in the UK or Hong Kong or US, started to look beyond Bordeaux for value and found it in Burgundies and super Tuscans,” says Anthony Maxwell, director of exchange at Liv-ex. “It’s a slight reaction to three years of overpriced en-primeur campaigns from Bordeaux.”
Bordeaux wines remain dominant but their share of market trade by value slipped from 95 per cent in 2010 to 83 per cent in 2013. Their prices reached heady heights after several years of spectacular harvests and increased interest from Asia.
Some attribute part of the loss of market share to a government drive against conspicuous consumption in China. José Luis Hermoso, head of research at International Wine & Spirit Research, says Beijing’s campaign has affected wines that are often used as gifts or served at official banquets. He also notes that the Chinese anti-dumping investigation into French wineries is unlikely to help Chinese demand.
Wine merchants, however, say Bordeaux wines have not lost their cachet and the shift towards Burgundies and Tuscans simply reflects increasing interest in different styles of wine.
“It makes the greatest wines in the world and it’s a bit fashionable to knock Bordeaux wine,” says Stephen Browett, owner of London’s biggest fine wine trader, Farr Vintners. “It’s like Manchester United and football – but it’s not necessarily true.”
He says that Burgundies only make up about 10 per cent of what he sells, but scarcity has added to their value. While Bordeaux is dominated by large châteaux, Burgundy is made up of hundreds of individual vineyards and the supply is more limited, especially after a bout of bad weather.
The top lots sold in Sotheby’s in New York and Hong Kong this year were Romanée-Conti (DRC) Burgundies. Liv-ex’s DRC index climbed 6.9 per cent this year.
Jamie Ritchie, CEO of Sotheby’s Wine Americas and Asia, thinks the interest in Burgundy has also come from a shift towards a lighter style of wine.
The Chinese interest in rich Italian wines, meanwhile, originates from more homely concerns. “Bordeaux wine doesn’t really suit Chinese food,” says Giles Cooper, marketing manager at Bordeaux Index, who thinks that domestic consumption of wine in China has helped boost the popularity of robust and more acidic Italian wines.
Mr Cooper doesn’t see demand for Bordeaux waning, but says people are more cautious: “In Asia, they have fallen out of love with Bordeaux to a certain extent … people bought a lot of stuff when the market was high .?.?. and I think, actually, the Chinese market felt rather taken advantage of and it’s muddied the waters a bit. It made people start to look elsewhere.”
Source: Financial Times