A combination of the Brexit effect and rising demand from Asia has given Bordeaux wine a boost after years in the doldrums, with wine merchants reporting last month’s sales were the best for the past five years.
While top Bordeaux wines such as Châteaux Lafite Rothschild and Margaux are traded around the world, many are held in bonded warehouses in the UK and priced in sterling. As a result, when the pound fell sharply following the British vote in June to quit the EU, international buyers benefited from a 10 per cent reduction in prices.
Bordeaux wine has been linked to the UK since Henry II acquired the region in 1152 as part of the dowry of his bride Eleanor of Aquitaine, making England a top export market. Many of the world’s leading wine merchants carry on the tradition from London.
BI, the global fine-wine merchant, reported a spike in sales in July driven partly by the fall in the value of sterling but also by the return of Chinese investors and collectors.
“We literally had to close down our [sales] screens at the moment of Brexit,” said Gary Boom, BI chief executive. “Everyone just piled in - and now the market is really moving.” The group’s BI LiveTrade Index, which tracks the prices of almost 250 top Bordeaux wines, is up almost 15 per cent in the year to date. By comparison, the FTSE 100 has risen nearly 6 per cent.
Pent-up demand for Bordeaux has grown over the past few years as investors and collectors sat on their hands while the market moved sideways. Now, collectors in particular are looking to replenish their stocks, says Tom Hudson, director of Farr Vintners, which specialises in the wine. “We have had a period of three and a half years of prices being pretty flat,” he said. “Now there is a sense of urgency in the market.”
The latest vintage has also met with widespread approval. “For the first time in five years, in 2015 the Bordelais have a vintage worth making a fuss of,” wrote Jancis Robinson, the FT’s wine critic.
Over the past five years, wine investors have suffered as demand collapsed after China’s crackdown on ostentation and luxury gift giving. In 2011, at the peak of the market, a case of ’82 Château Lafite Rothschild - the most popular vintage among Chinese collectors - was selling for about £45,000. Now, that has slipped to £26,000, says Berry Brothers & Rudd’s website.
August 2016
Bordeaux vintners raise a glass to Brexit effect as wine sales reach five-year high
A combination of the Brexit effect and rising demand from Asia has given Bordeaux wine a boost after years in the doldrums, with wine merchants reporting last month’s sales were the best for the past five years.
While top Bordeaux wines such as Châteaux Lafite Rothschild and Margaux are traded around the world, many are held in bonded warehouses in the UK and priced in sterling. As a result, when the pound fell sharply following the British vote in June to quit the EU, international buyers benefited from a 10 per cent reduction in prices.
Bordeaux wine has been linked to the UK since Henry II acquired the region in 1152 as part of the dowry of his bride Eleanor of Aquitaine, making England a top export market. Many of the world’s leading wine merchants carry on the tradition from London.
BI, the global fine-wine merchant, reported a spike in sales in July driven partly by the fall in the value of sterling but also by the return of Chinese investors and collectors.
“We literally had to close down our [sales] screens at the moment of Brexit,” said Gary Boom, BI chief executive. “Everyone just piled in - and now the market is really moving.” The group’s BI LiveTrade Index, which tracks the prices of almost 250 top Bordeaux wines, is up almost 15 per cent in the year to date. By comparison, the FTSE 100 has risen nearly 6 per cent.
Pent-up demand for Bordeaux has grown over the past few years as investors and collectors sat on their hands while the market moved sideways. Now, collectors in particular are looking to replenish their stocks, says Tom Hudson, director of Farr Vintners, which specialises in the wine. “We have had a period of three and a half years of prices being pretty flat,” he said. “Now there is a sense of urgency in the market.”
The latest vintage has also met with widespread approval. “For the first time in five years, in 2015 the Bordelais have a vintage worth making a fuss of,” wrote Jancis Robinson, the FT’s wine critic.
Over the past five years, wine investors have suffered as demand collapsed after China’s crackdown on ostentation and luxury gift giving. In 2011, at the peak of the market, a case of ’82 Château Lafite Rothschild - the most popular vintage among Chinese collectors - was selling for about £45,000. Now, that has slipped to £26,000, says Berry Brothers & Rudd’s website.
(c) 2016 The Financial Times Limited