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Bordeaux trading rises on US tariff suspension ahead of 2020 EP campaign

Published:  19 April, 2021

Market sentiment towards Bordeaux is “showing signs of recovery” as this year’s En Primeur campaign swings around, according to the Liv-ex members’ Bordeaux report released today.

Calling a small but generally high quality 2020 vintage, the report reasoned that this, coupled with the suspension of swingeing US tariffs on French wines, and the potential future shortfall from a heavily frost impacted 2021 vintage, is driving renewed interest in Bordeaux.

The Liv-ex fine wine marketplace reported that the region had increased its market share to 41.6% by mid March, against 33.2% in January, with the easing of US trade tariffs on 4 March giving the region a significant boost.

“The recent lifting of the tariffs has had a marked effect on activity – leading to a strong kick in demand for wines of all regions, including Bordeaux,” said Justin Gibbs, Liv-ex director and co-founder.

Liv-ex also reported strengthening trade in 2018 in-bottle Bordeaux wines in the back of positive recent critical reviews of the vintage.

The Bordelais had planned En Primeur tastings in 10 cities across Europe, Asia, the UK and US, but this has now been scaled back to planned tastings in Bordeaux, Frankfurt, Brussels and Zurich in late April, with samples being forwarded to key merchants and critics elsewhere in mid-April.

The report predicts another ‘rapid fire’ campaign, with the small 2020 vintage meaning that there is a possibility that prices may rise after the moderate pricing of 2019, dependant both on critics’ scores, but with chateaux also potentially withholding some stock.

Price rises will, however, come at a sensitive time and to keep buyers engaged in this campaign Bordeaux “can ill afford to put a foot wrong”, stated Liv-ex.

“After the excitement of price cuts last year, the Bordelais will need positive views to justify price rises this year,” said the report.

“But even positive scores should not be seen as a green light to race back to 2018 pricing levels. Especially when considering how finely balanced market sentiment towards Bordeaux currently is.”

Gibbs highlighted the surprise success of the 2019 campaign, in the midst of the early waves of the pandemic, where after a somewhat scattergun supply of samples to critics and trade, scores were high but prices remained lower than 2018.

“The [2019] campaign’s success demonstrated that there is a willing market out there ready for the magic of Bordeaux – the producers simply needed to seize the opportunity,” said Gibbs.

The Liv-ex 1000 index reached an all time high on 8 April, although Italy was a prominent driving force, with its last peak in November 2018 driven primarily by Burgundy.