Burgundy has long been France’s premier wine region. The Bordelais may take issue with that statement. But it’s the Burgundians who fetch the highest prices for their bottles at present. It was, after all, a bottle of 1945 Romanée-Conti that fetched a record-breaking $558,000 at Sotheby’s in New York last October, while another sold for $496,000 at the same auction. “These wines are now virtually unobtainable, rare as they were even decades ago,” said the honorary chairman of Sotheby’s Wine, Serena Sutcliffe, after the sale. “Those who bought them have vinous miracles in their possession.”
That the bottles had been bought to be drunk is part of the reason they sold for such exceptional prices, the auctioneer, James Ritchie, tells Abby Schultz in Barron’s Penta. No ordinary bottles these. Only 600 had been produced; 1945 is considered to be a good year and was the last vintage for the particular vines that produced the wine; and the provenance was impeccable. But even so, the $32,000 pre-sale high estimate placed on each bottle, when compared with what they actually sold for, suggests that even the auction house was taken by surprise. The auction room was apparently filled with Burgundy lovers with deep pockets, as opposed to investors. “When you have so much wealth available in the world, the things that people really treasure are these very special moments where you get the opportunity to do something that’s unique,” says Ritchie. But even deep pockets have their limits.
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Any wine from the renowned Domaine de la Romanée-Conti (DRC) is, of course, exceptional. Burgundy, in general, also has a relatively low output (3% of France’s total), making Burgundies rarer than wines from, say, Bordeaux. Considering the market had risen by 94.9% over five years, according to the Liv-ex Burgundy 150 index, it perhaps should have come as no surprise that every lot was successfully sold at the Sotheby’s sale, which raised a total of $7.3m.
Yet no sooner had the hammer come down on those ’45s than the market took a turn for the worse. The index is down by 6.2% in the year to the end of June. “The question many investors are now asking themselves is whether the Burgundy bubble has burst,” says Alan Livsey in the Financial Times. “For investors – and wine drinkers – Bordeaux could offer better value.” Revenge for the Bordelais at last.
It could just be a case of the market adjusting to more reasonable valuations after years of growth. The Liv-ex Bordeaux 500 index, which rose by 34.8% over five years, plateaued over the last 12 months. And if it should slip, there is always Italian wine. The Italy 100 bucked the trend with a rise of 2.4%. As for Burgundy, there are still buyers for the top stuff. At the beginning of the month six magnums of Henri Jayer’s Vosne-Romanée, Cros-Parantoux 1996, fetched £97,600 at Bonhams in London – close to, but not quite reaching the £100,000 high estimate (and unlike the estimate, the sale price also includes the buyer’s fee). Burgundy’s heady days look to be over for now.
This article was originally published in MoneyWeek
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