10 May 2024

Monthly Market Review: Anticipating En Primeur - April 2024

Tagged: Regional Bordeaux En Primeur Closer Look

Cult Wines Indices – Returns as of 30 April 2024

April2024 Indices Graph

Source: Pricing data as of 30 Apr. 2024. Cult Wines Indices are an objective measure of the global fine wine market based on Wine-Searcher pricing data and rebalanced annually based on strict liquidity criteria. Prices calculated in GBP and results may vary in other currencies. Past performance is not a guarantee of future results.

The Cult Wines Global Index registered a mild decline of -0.6% in April, indicating a marginal downturn compared to the previous month.
The Cult Wines Bordeaux index witnessed a minor decrease of -0.2% in April, showing relative stability compared to the previous month's performance.
In April, the Cult Wines Burgundy index saw a slight decrease of -0.8%, indicating a continuation of the downward trend noted in the preceding month. Conversely, the Cult Wines Champagne index displayed resilience, posting a modest increase of 0.7% in April, recovering from the notable decline seen in March.
The Cult Wines Italy index showed a marginal decrease of -0.3% in April, maintaining relative stability compared to the previous month.
The Cult Wines USA Index saw a substantial drop of -1.4% for the month, indicating a significant downturn when compared to the performance of the previous month.

Bordeaux En Primeur 2023

Whilst the market continues to stabilise, we are entering the most significant period of the wine annual calendar.

The Bordeaux 2023 vintage appears poised to offer the most promising opportunity for En Primeur purchases since the 2019 vintage, which was released four years ago. Unlike previous En Primeur releases, we anticipate an early and expedited campaign, with many top wines expected to announce their prices within the next few weeks.

Following our En Primeur trip, we were encouraged by both the quality of many wines we sampled and the newfound sense of realism regarding pricing, which several châteaux have already demonstrated. Key producers such as Lafite, Leoville Las Cases, Mouton Rothschild, and Pontet Canet have already released their wines with most prices dropping by 20% to 30% compared to last year's releases, presenting attractive entry points for investors

Our Picks of the Bordeaux Releases So Far

Here are the investment team's top EP2023 picks, selected for their potential for investment:

Léoville Las Cases 2023: With a massive price reduction of 40% on the 2022, this vintage looked attractively priced vs. back vintages in the secondary market. Neighbouring Ch. Latour & consistent global demand, the brand sells itself.

Pontet-Canet 2023: The first potentially perfect wine of the campaign with 98-100pts from Jane Anson, the recently unveiled Pontet-Canet 2023 appears to stand out as one of the standout wines of the vintage. Significant improvement in quality compared to its prior vintages. Alongside its 98-100 points from Anson, this 2023 Pontet also received 97-99 points from The Wine Independent's Lisa Perrotti-Brown MW, 96-98 points from the Wine Advocate's Yohan Castaing and 93-95 points from Vinous's Neal Martin.

Carruades de Lafite 2023: Made from the same terroir, using the same wine-making team as the Lafite Rothschild Grand Vin. Consistently strong performance post-release. With an 18% reduction from the 2022 release, there is obvious appeal vs back vintages in the secondary market here with Carruades 2023.

Lafite Rothschild 2023: Released at a 32% discount to the 2022 ex-neg & 16% down from 2021, this puts it both below the release price of the previous 7 releases and at the lowest price currently on the market. Receiving a near-perfect score of 98-100 points from both Jane Anson and 97-99 points from the Wine Advocate, this vintage presents promising investment prospects given its favourable PoP (price-over-points) ratio.

d’Armailhac 2023: Managed by the same winemaking team as Mouton Rothschild, Château d'Armailhac may have been overshadowed by its more renowned siblings in the eyes of some wine enthusiasts. However, this Pauillac estate has consistently offered exceptional value and merits closer consideration. Released at a 16% discount from the 2022 release price, we believe that d’Armailhac 2023 offers great value.

Macro Market Summary

April2024 Table1

Source: Investing.com, Wine-Searcher as of 30 Apr. 2024. Past performance is not indicative of future returns.

April reiterated the risk of persistent inflation, posing a potential challenge to the rally in risk assets.
S&P 500 (TR) declined by 4.1% in April due to pressure on valuations from rising bond yields.
The ECB is still projected to initiate its first rate cut during the summer, although market outlooks have reduced to just two cuts priced in by year-end. The BoE is forecasted to follow suit, with the first cut now anticipated for September.
The eurozone's flash composite PMI surged to 51 in April, notably surpassing the December recessionary level, while the UK's composite PMI reached a robust 54, indicating expansive economic activity.
Commodity prices saw an upswing due to a resilient economic environment and heightened concerns about escalation in the Middle East, with the Bloomberg Commodity Index surging by 2.2% in April.

Regional Wine Market Performance

April2024 Table2

The CW Bordeaux index experienced a slight decline of -0.2% in April, contributing to a YTD decrease of -2.3%. Despite this, Bordeaux took the lead on Liv-ex trade during the last week of April as the Bordeaux En Primeur 2023 campaign commenced, representing 33.2% of the total trade value. Notable increases were seen in wines such as Carmes Haut Brion 2013, which rose by 14.7%, and Chateau La Mission Haut-Brion 2018, which increased by 14.3% monthly. Conversely, older vintages like Chateau Pichon Baron 2008 and Chateau Lafleur 2007 saw declines of more than 10% in April.

In April, the CW Burgundy index saw a slight decrease of -0.8%, indicating a continuation of the downward trend noted in the preceding month. There are some iconic producers, such as Domaine Georges Roumier, Chambolle-Musigny 2009 (-20.5%), Etienne Sauzet, Montrachet Grand Cru 2011 (-18.2%) as well as Domaine Dujac, Vosne-Romanee Premier Cru, Aux Malconsorts 2011 (-17.9%), all experienced price drops, contributing to the overall downward performance of Burgundy. However, these declines may present potential entry opportunities for long-term investors. Among the best-performing wines for the month were Domaine Marquis d'Angerville, Volnay Premier Cru, Clos des Ducs 2017 & Dugat-Py, Gevrey-Chambertin, Vieilles Vignes 2014, up 12.3% and 11.6%.

The CW Champagne index displayed resilience, posting a modest increase of 0.7% in April, recovering from the notable decline seen in March. Strong market demand was observed for wines such as Veuve Clicquot, La Grande Dame 2012 (+10.2%), Louis Roederer, Cristal 2013 (+5.5%), and Philipponnat, Clos des Goisses (+5.2%). Multiple vintages of Egly-Ouriet, Brut Millesime Grand Cru experienced gains, with the 2012 vintage leading with a 14.4% increase. In the final week of April, Champagne accounted for 12.4% of Liv-ex trade activity, with notable contributions from Louis Roederer Cristal 2015, which emerged as one of Liv-ex’s most-traded wines both in terms of value and volume.

The CW Italy index showed a marginal decrease of -0.3% in April, maintaining relative stability compared to the previous month Casanova di Neri, Brunello di Montalcino, Tenuta Nuova 2017 was the top performer in April, up 15%. Three Super Tuscans were among the top performers of the CW Italy index. Solaia 2013 & Tignanello 2008, up 8% and 7% respectively, as well as Sassicaia 2005 (6.1%). While certain wines within the Italian market demonstrated healthy growth, there were also declines observed among specific wines, such as Bruno Giacosa, Barbaresco, Asili 2015 and Guado Al Tasso, Bolgheri 2016, down 15% and 8% respectively in April.

The CW US index saw a substantial drop of -1.4% for the month, indicating a significant downturn when compared to the performance of the previous month. On trade, The USA recorded a deeper fall, from 5.5% to 3.2% of Liv-ex trade share in 3rd week of April. Driving the index down were Cardinale, Napa Valley 2007 and Verite, Le Desir 2013 Verite, with declines of 17.4% and 4.3% respectively. Among the winners, several vintages of Opus One have performed well, including 2015 (+8.4%), 2013 (+7.5%), and 2017 (+6.0%).

Wine Performance League Table – YTD Return % Across Vintages

April2024 Table3

Source: Pricing data from Wine-Searcher as of 30 Apr. 2024. Based on average across all vintages of wines contained in Cult Wines Indices, which are rebalanced regularly based on strict, objective liquidity criteria. Prices calculated in GBP and results may vary in other currencies. Past performance is not a guarantee of future results.

Launched in December 2022, the Cult Wines Global Index and Cult Wines Regional Indices form benchmark measurements of the global fine wine market performance with historical data, powered by Wine-Searcher, going back to the beginning of 2014. The Indices are separate from Cult Wine Investment Performance which tracks wines purchased by Cult Wine Investment.

Past performance is not indicative of future success; the performance was calculated in GBP and will vary in other currencies. Any investment involves risk of partial or full loss of capital. The results depicted here are not based on actual trading and do not account for the annual management fees that may be charged to a Cult Wine Investment customer which range from 2.25% to 2.95% depending on the size of the portfolio, and there is no guarantee of similar performance with an investor’s particular portfolio.