Monday, 17 November 2014

Bordeaux Poised For Recovery?

In light of comments made by the managing director of Liv-ex, on the fortunes of one of France’s most famous fine wines, Ideal Wine Company has been inspired to ask; is Bordeaux poised for a recovery?

A Superior Vintage
The Ideal Wine Company exists to bring you fine vintages from every corner of the globe at a reasonable price. Many of those vintages originate from the French region of Bordeaux.

Bordeaux wines are a cut above the rest. The climate, temperature and terrain of the region fosters the facilitation of superior bottles. Nevertheless, the value of Bordeaux as a fine wine has been in steady decline in recent years; a trend that according to Liv-ex managing director James Miles, is set to change.

How Bordeaux Can Turn Its Fortunes Around
According to Harpers, Miles suggested that now is a good time to enter the Bordeaux market. This is because prices for Bordeaux currently sit at their “lowest ebb since the early 1970’s,” after four years of continually falling values. In other words, it’s ripe for a boom.

Speaking at the Hong Kong International Wine and Spirits Fair, the managing director gave his opinion on how Bordeaux can turn its fortunes around. Specifically, he called for a “well-priced 2014 vintage,” adding that it would act as a “vital precursor to any kind of sustained recovery.”

A Reasonably Reliable Boom and Bust Every Ten Years
Miles also expanded on the general boom and bust nature of Bordeaux, which he argued is cyclical.  He suggested that evidence illustrates that Bordeaux experiences a “reasonably reliable boom and bust every ten years or so.”

The managing director went on to point out the nature of the boom and bust trend, saying that “while booms and busts in wine are influenced by external factors – in this case, UK pension reform, the collapse of Lehman, the removal of tax in HK and the huge fiscal stimulus in China in 2009 – they also tend to be self-inflicted and tend to start and finish with successful and disastrous en primeur campaigns, in this case the 2005 and 2010.”

The 2014 En Primeur Campaign Has to Work

In other words, yes Bordeaux is poised for a recovery, but that doesn’t mean it will actually recover. As Miles went on to point out, Bordeaux’s 2014 en primeur campaign needs to be able to work with “prices falling far further than many in Bordeaux currently appreciate.”