Cult Wines: Bordeaux takes a tumble with steepest fall in June

By Jo Gilbert

Published: 07 July, 2023

Cult Wines, which has its finger on the pulse of the fine wine market, reports a -0.83% decline in fine wine markets in June, marking the downturn of a broader market correction following an extended rally which ran from mid-2020 through to 2022.

The findings, from Cult Wines Global Index, shows the extent to which this correction has taken hold, with Bordeaux uncharacteristically experiencing the largest drop last month.

As the most established region in the fine wine investment market, Bordeaux usually maintains relative stability and previously outperformed Burgundy and Champagne during the early-year downturn. This correction likely stems in part from a shake-up of the market during the 2022 en primeur campaign, when the release of the high-quality 2022 wines triggered increased regional trading activity and thus led to a repricing of some back vintages. The stronger British pound relative to the US dollar also impacted the indices negatively, (Cult Wines Indices are calculated in pounds sterling).

However, the Rhône, another region known for stability, also struggled in June. This was possibly in part due to the market’s focus on Bordeaux, with some older Chateauneuf-du-Pape vintages experiencing price declines, including Domaine du Pegau, Cuvee Reservee Rouge 2009.

“The fine wine market appears to be going through a corrective period following an extended rally,” Olivier Staub, CIO for Cult Wine Investment, told Harpers.

“Given the extent of the rally, a temporary downturn is not unexpected and must be kept in perspective. Fine wine is a long-term investment and returns still look healthy from this perspective – Cult Wines Global Index is up 34% over the past three years (as of 30 June). Furthermore, previous downturns have not lasted nearly as long as the upswings. Even if this current slowdown persists a little longer, history indicates that an eventual rebound could be quick and stronger than the decline.”

On the up side, both the Cult Wines Burgundy and Champagne Indices continued to see price consolidation following impressive rallies in 2021 and 2022. Demand remains for both regions, though consumers have become increasingly more selective. For example, one of the biggest declines came from Perrier Jouet, Belle Epoque 2002 Champagne, whereas the 2004 vintage of the same wine jumped in price by 8.50%.

Additionally, the Cult Wines USA Index, a region that often behaves idiosyncratically when compared with the rest of the market, was up in June, with a 0.11% gain. The uplift was driven by two rare premium wines: Schrader, RBS Beckstoffer To Kalon Vineyard Cabernet Sauvignon, Oakville 2018 surged by 20.1%, and Paul Hobbs Beckstoffer Dr. Crane Vineyard Cabernet Sauvignon, St. Helena 2015 rose by 12.2%.

Printer friendly version