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Bordeaux Index - future en primeur prices will remain high

Published:  10 August, 2011

Top vintages are likely to continue to be priced "aggressively" in future en primeur campaigns, after the 2010 market remained strong in July, according to Bordeaux Index.

Prices remained static, albeit on a strong turnover, with Château Lafite dominating turnover for the month, said managing director Gary Boom.

The campaign overall was somewhat muted, but there was very strong demand for the top wines, he added.

"With a dominant foothold in both the traditional and emerging markets, it was no surprise to see Lafite 2010 dominate turnover for the month.

"Moreover, good numbers for both Margaux and Haut Brion fit our longer term analysis for growth for these two châteaux."

"It's likely this will have gone a long way to convince the leading châteaux to continue to price 'great' vintages aggressively in the future.

He said, the Mouton and Latour campaign was relatively muted and Latour continued with an already well established protocol of keeping back a large portion of the new harvest and this year Mouton decided to do the same.

"This might have the effect of supporting prices in the short run, with a near record number of top vintages produced in the last decade, it remains to be seen how this strategy will work out going forward."

Although macro events of the last week saw nearly all major global equity indices experiencing double digit sell offs, said Boom.

"Appetite for risk is clearly at its most pressured for a long while.

"While it's far too early to ascertain what effect this will have on the wine market, it would seem likely that we will see prices soften a degree this month, even if it is more a consequence of widening bids and increased risk aversion rather than any fundamental shift in demand.

"The Asian mid-autumn festival will, as usual, be the most illuminating indicator of H2 activity and strong order books in early September should exert some welcome upwards pressure on prices.

"In the meantime, canny investors may even be able to pick up a bargain or two."