Wine prices are heading up again—only this time it’s Burgundy wines and not Bordeaux capturing all the headlines as recent Burgundy auctions have been setting records.According to a recent report from WineSpectator, “Move Over Bordeaux: Burgundy Steals the Show at Asia Auctions,” prices for the top Burgundy wines are rocketing higher.
“As a category, the 102 Burgundy listings tracked by the Wine Spectator Auction Index rose 16.42 percent from the third quarter of 2010 to the third quarter of 2011. Many wines fared even better,” said the report. “Domaine de la Romanée-Conti (DRC) Romanée-Conti 1996 was up 114% to average $13,310 per bottle, G. Roumier Bonnes Mares 1985 was up 90% to average $2,681 per bottle and Joseph Drouhin Montrachet Marquis de Laguiche 1996 was up 41%, averaging $462 per bottle.”
Several factors are driving the price increases.
Karl H.K. Lung, AIWS is principal lecturer at the Hong Kong Wine Academy in Kowloon, Hong Kong. In an e-mail response, he reports seeing increased interested in Burgundy wines among his students and industry contacts. Similar to buying trends in Bordeaux in recent years, though, he says that buyers’ interest is concentrated at the top end of the market.
High prices for the top Bordeaux is a factor, explains Lung. “Many seasoned wine drinkers considered the price of fine Bordeaux wines, especially those from the top chateaus, way too expensive, and are buying wines from other wine regions which now offer much better value compared to those from Bordeaux. Meanwhile, I am not surprised that many Bordeaux wine buyers were (in the market) for speculation and after the strong rise in the past few years, are now taking profits, and we already see some softening in Bordeaux.”
Lung believes another factor is less familiarity with Burgundy wines among new buyers. “I think probably another reason is that everyone is now familiar with the top wines in Bordeaux, so it lacks the feel of ‘something special’”, he writes. “Given that Burgundy is the next well known fine wine region after Bordeaux, it is not surprise that people will switch to Burgundy. However, this rotation buying is not limited to Burgundy. Top Italian wines (Barolo, Brunello, etc.) are also seeing stronger demand.”
The price increases weren’t completely unexpected. Jack Hibberd, research manager at the Liv-ex, a fine wine exchange in London, says there were indications in the past year or so that Burgundy prices were set to move higher. “There was a lot of chatter in the trade about DRC and other top Burgundies,” he explained in a phone interview.