The ranking of the best vineyards, based on the best-selling wines on the market, was created in 1855 following an exhibition in Paris. It was launched by a community of Bordeaux wine merchants. The list included the premier crus to the fifth crus, including more than sixty of the region's 2000 vineyards. The best Bordeaux wines, along with the great Burgundies, remained at the top of the best and most expensive bottles on the market.
But the online report released by Liv-ex every two years since 2009 has allowed us to observe the significant growth of Californian wines. They are now competing with the best bottles of Bordeaux and Burgundy, and seem to be enjoying growing success. But will they succeed in dethroning these international market leaders? What are the reasons that could explain this decline?
A move towards a more diversified market
Despite the arrival of news on the market, French wines have not lost their reputation. However, the shift towards a more diversified consumer market has had a major impact on the sector. Bordeaux and French wines are no longer the only ones to be good wines. Indeed, other regions have managed to offer the same level of quality.
But price is also a factor that has shaken up the market. Other regions offer more affordable prices for the same quality. This explains the enthusiasm of buyers for these offerings, such as Champagne or the Rhône. However, this does not mean that French wines are unaffordable. While prices continue to climb, those of other regions are also increasing, and at a rapid pace. French and Bordeaux bottles are still among the best, but the price-quality ratio is a handicap in the market.
The secondary market trends were confirmed by the latest rankings released by Liv-ex. The results clearly demonstrated that Bordeaux wines have declined significantly in secondary market trading. Two years ago, Bordeaux accounted for 37% of this ranking. This percentage has dropped this year. Bordeaux now represents only 28,6% of the list.
The market's diversification is no longer in doubt, as other countries continue to innovate and improve in this area. Moreover, the number of bottles traded from each country is continually increasing. American wines, for example, have managed to be represented on four levels, although they only appeared in the first two levels in the previous ranking. But the Rhône, Tuscany, Bordeaux, and Piedmont are also found in all five levels.
The criteria for participation in the Liv-ex ranking
Specific criteria were considered to allow vineyards to appear in the classification. Indeed, a negotiation of a 75 cl or 150 cl bottle must have taken place between 1er July 2020 and June 30, 2021 on Liv-Ex. Special transactions were considered, only for Burgundy, Champagne, the United States, and Australia. These exceptions were in addition to the Standard En Primeur, Duty Paid, and Standard in Bond transactions valid for other regions. But that wasn't all.
Five (or more) vintages of the wine in question must also have been traded during the same period, and the wine must have been traded at least 15 times. Once these criteria have been met by the bottle, Liv-ex calculates the average price per case of a dozen bottles to categorize it into the appropriate price range. These prices are updated every two years to assess their evolution.
In conclusion, the Liv-ex rankings suggest that consumers are constantly seeking better value for money. Faced with the ever-increasing prices of well-known brands, they prefer to turn to emerging regions in the sector, rather than choosing the major market leaders offering higher prices for the same quality. This trend is expected to disrupt the next ranking.
Patrick.K
