More intelligent analysis from Liv-ex, 2009 Bordeaux and the billionaire index

Interesting blogpost here from Liv-ex in which they show an amazingly close correlation between the number of billionaires (according to Forbes’ rich list) and the Liv-ex 100 index of fine wine prices.

They are smart enough to realize that correlation does not equal causation, and point out that fine wine prices rising alongside billionaire numbers doesn’t mean that billionaires are all buying lots of wine. But the number of billionaires is probably a good index of the number of highly wealthy, and these will be the core market for fine wines.

The point? Although there’s a global recession and many people are feeling the pinch, this does not mean that fine wine prices will necessarily fall. The top wines are made in relatively limited quantities, and the reason they are expensive is simply because of demand. From looking at the shape of the billionaire curve from Forbes, there are probably going to be plenty of customers lining up around the globe eager to purchase the top Bordeaux wines from the 2009 vintage.

This means that for the very top wines of 2009 (the top classed growth left bank wines and the elite Pomerols and St Emilions), expect prices to be higher than 2005. They’ll sell – their customers really want the wines and aren’t terribly price conscious.

So I reckon the real work for wine critics attending the en primeurs in a few weeks will be to identify the best value wines: those which deliver real quality at realistic prices. I imagine there will be quite a few of these. Any budding young Bordeaux critics want to make their mark? Then identify the £200/case stars. This is what smart drinkers will be going for.

2 comments to More intelligent analysis from Liv-ex, 2009 Bordeaux and the billionaire index

  • Nick Robinson

    I’ve pretty much ditched the idea of buying any Bordeaux this year

    I’ve got some 2007 and 2008, but the coverage of the likely 2009 prices is bordering on scare mongering!

    If someone can find a £200 a case star, how long will it remain at £200?

  • Good summary – I can’t see prices for the top chateaux staying reasonable. Don’t forget Sauternes and Barsac though which have produced possibly even better wines than the reds and will be good value.

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