Are Bordeaux Prices Really Stagnating?

In the atrium at Chateau Latour hangs an immense aerial photograph. It depicts an impossibly vast field of flowers and comes from the 2011 photo series Tulips by Andreas Gursky, who holds the record for the most (and fifth-most) expensive photo ever sold. Stumbling across such a piece in what is essentially a waiting room is jarring but hardly revelatory when you consider the joint is owned by billionaire art collector Francois Pinault. The economics of fine art is notoriously contentious, but what about wine? They say a rose (or rosé?) by any other name would smell as sweet, but would it? As rumour swirls about stagnating prices, it’s time to take a closer look at the buying and drinking of premium wine.

Like art – or stocks – fortunes have been won and lost in the wine market. In 1982 a fresh bottle of Chateau Lafite Rothschild Grand Cru Classé was worth about $170 (USD) accounting for inflation. Today that same bottle is worth about $5,500 – a 6,500% increase. For perspective, that’s about three times more profitable than Apple Inc stocks over the same period. Great news for veteran collectors, but do fortunes look as bright for contemporary Bordeaux investors?

A study by search engine Wine-Searcher has revealed that over the last 12 months Bordeaux’s most expensive labels have enjoyed a paltry return of under 1 percent. And over the last five years those same wines have seen around a 2.5% price increase: a loss when accounting for inflation. Merivale Master Sommelier, Franck Moreau, is skeptical about an impending market crash, though.

“I’m not 100 percent sure this is happening,” says Franck. “If anything, I think it’s the opposite. Bordeaux has never put so much pressure on the wine world to demonstrate their quality, or tried so hard to promote their wine in different ways. The price might be getting prohibitive for some people, but you also have to account for the fact that some markets – like China, which has been a big driving force – have faced some difficulties over the last few years,” he says. “It might explain why the region has slowed slightly, but Bordeaux is always looking for new markets to expand into.”

He points to the growth in cabernet sauvignon crops over the last decade as evidence for the staying power of Bordeaux. Already one of the most plentiful grape varieties, the last ten years has seen a further spike in the grape’s abundance due to planting in emerging wine growing regions. “The demand for fuller red wines is clearly there, even ones without the prestige of Bordeaux.”

Willing to put his money where his mouth is, Franck admits that he’s dabbled in a few Bordeaux investments this year. “Hopefully I win the lottery, so I don’t have to sell them,” he says. “If I get rich, I’ll be able to drink them for myself!”

However, Franck doesn’t dispute that investors are beginning to take things a little more seriously across the border. “The quality of wine coming out of Italy has been steadily improving over the last decade,” he says. For investors, “if you look at regions like Barolo or Brunello, there are definitely some options with great ageing potential for good value. Not everyone can go to the top chateaux in Bordeaux, but with Italian wine you have a bigger range.”

It seems that while collectors have taken note, with the top 10 Italian wine stocks rising over 40% in the last five years alone, there are plenty of opportunities for drinkers to look outside the Bordeaux bubble as well. Also interesting is that it isn’t just full-bodied Bordeaux-style (cabernet sauvignon, cabernet franc etc.) wines fueling the surge in Italy. Classic Italian varieties like nebbiolo and sangiovese appear to be at the forefront of the charge – something that Franck attributes to the improving quality in wine in the country.

For those of us more interested in enjoying a glass of wine without the anxiety of the market weighing on us, is it still worth looking in the same place as collectors? “No,” says Franck. “The value of collectors to the drinking market is that they typically store and maintain wine correctly, so not only is it a good investment, but you have the security that it will taste the way it should. For uncomplicated drinking, you should look to emerging regions, unique varieties, upcoming producers,” he says.

But if a bottle of Bordeaux eludes you, and you’re looking for wine with the some of the qualities that make the region so prestigious, here’s Franck’s guide to the next best things:

Franck says: This is the second wine of Sassicaia, one of the most well-known Super Tuscan winemakers in Bolgheri. For drinkers who want a Bordeaux-style blend on a budget this one’s 60% Cabernet Sauvignon and 40% Merlot.

Franck says: Another top Super Tuscan is the 2016 Ornellaia. This is a great value buy for any investor at $350. For another great value buy I’d will go with Mt Mary ‘Quintet’ from the Yarra Valley for just over $200.

Franck says: My anytime drinker is a blend of cabernet sauvignon and merlot from South Australia’s Eden Valley. For under $25, you can’t go wrong here.

  • From a historic region: Aussie stars

Franck says: Australia has been making cabernet for a long time and is truly home to some of the best value examples. With a slightly cooler climate, Yarra Valley produces one of the more elegant style cabernets. One of my favourites is Yeringberg Cabernet Sauvignon ($99.99). It’s the oldest winery in the region and consistently delivers great traditional wines that have wonderful ageing potential.

  • For something with age on it: from home and abroad

Franck says: Okay this one might be cheating, but my recommendation here is to actually buy from some smaller appellations of Bordeaux, like Château Potensac 2015 ($99.90) or Chateau Potensac 2006 ($124.90). Otherwise Wynn’s Black Label from Coonawarra always ages very well if you can get your hands on it.

And for the real deal? Check out the cellars at Bert’s, Fred’s and Felix for a comprehensive list of vintage and super-rare Bordeaux Grand Cru Classé.