2018 Stannary Market Report
Stannary Burgundy Update
2018 has been another successful year at Stannary. We have been thrilled to receive our first allocations of Meo-Camuzet & Jean-Marc Millot in Vosne Romanee, Domaine Y.Clerget in Volnay, and Henri Magnien in Gevrey Chambertin. We continued to see solid growth in Burgundy with 44% increase in value and 14% increase in quantity compared to last year. Praise continues to be lauded on two of our key exclusivities Pierre Duroché and Maxime Cheurlin (Georges Noëllat), Burgundy’s newest stars whom we have supported from their first vintage. Our exclusive 2016 Dujac En Primeur tasting and dinner held at the end of May 2018 reaffirmed Dujac to be among the top echelon of Burgundy growers. It came as no surprise to see his name mentioned in the Liv-Ex article 2018 Power 100 – Top 10 movers as ‘the biggest story and subsequently the biggest riser in this year’s Power 100 was Burgundy’s Dujac’.
The Burgundy market started strong in January, when Wine Lister published their dedicated Burgundy Report saying the region was ‘the darling of fine wine collectors worldwide. Burgundy is the hottest property in fine wine terms and showing no signs of cooling down any time soon’. 2018 saw a continuation of a strong Burgundy market. Headline news was focused on two exceptional auction results:
- June 2018; Baghera wines sold the last remaining bottles from Jayer’s Cellar for US$34.7 million, which was double the top-end estimate.
- October 2018: Sotheby auctioned Robert Drouhin’s (from Domaine Drouhin) personal cellar of DRC, which broke all previous records for most expensive bottles sold, with two bottles of 1945 Romanée Conti fetching US$558,000 and US$496,000 respectively.
Though the headlines focussed on top names such as DRC and Jayer, we saw a broadening of the Burgundy market away from these iconic brands. The LivEx December Market Report reported that the top 10 price risers in the Liv Ex 1000 were all Burgundy. Similarly, the Liv-ex Power 100 – the annual list of the most powerful brands in the fine wine market- has seen an increase of Burgundy producers (at the cost of Bordeaux) and 15 of 22 new entrances were Burgundy, including names like Lafon, Dujac and Lamarche. DRC, Jayer, Coche Dury are reaching unprecedented heights and it is difficult to see them increase further (yet I have said this 3 and 5 years ago!). However, the financial gap between these icons and those following in their footsteps shows such disparity, that a broadening of the market is logical. Burgundy, with a smaller annual production than Bordeaux and therefore an inherent imbalance between supply and demand, is less likely to see the fluctuations of the Bordeaux market. An increasing educated world market, putting pressure on already limited stock, suggests a continuation of a flourishing Burgundy market. The charm of Burgundy where owners are the same as the wine-makers, who also greet visitors (in the absence of marketing teams), also fills another current trend, described by Wine-Lister in their December report (Slow and Steady Wins the Race) as ‘Other trends we’ve identified mirror what is happening in the wider fine wine world; a desire for the small, the personal, the romantic, over the large, the anonymous, the corporate. This is reflected in Burgundy’s edge over Bordeaux’
Interest in Burgundy, especially over the past 15 years, has dramatically changed the landscape. Firstly, land prices have increased dramatically with some headline sales including an ouvrée (0.0417ha) of Montrachet selling in 2014 by Francois Pinault for 1million euro. The same year Domaine Leroy bought 7 ouvrées of Batard-Montrachet for reportedly a not dissimilar amount. In 2014, LVMH bought Clos des Lambrays (10ha, including 8.7ha of Clos Lambrays Vineyard) at 101 million euros. Domaine Clos de Tart (7.5ha) sold in 2017 for an undisclosed sum, which is rumoured to have been 225 million euros. To put this into context, an ouvrée if harvested at 25hl/ha (and I expect it was far less in the last few vintages) equates to 2500 litre per ha (3333 bottles) or 139 bottles. Aside from making good headlines, the reality is that land prices have increased pressure on families to sell, the cost of inheritance and by default have increased the cost of making wine in Burgundy’s golden coast.
However, the influx of money is also responsible for one of the most exciting changes in the Burgundy. A young generation is taking over at historical estates, where the previous generation may have chosen to sell the fruit, and they are actively deciding not to sell the land despite stratospheric price. Instead, this well-educated generation (often with wine-making experience abroad) with pride in their heritage choose to make their own wines and are dedicated to making the highest quality they can. Quality in Burgundy has never been better, and a new generation of icons is definitely in the making. After all, outstanding Burgundy is a combination of terroir, climate AND winemaker. With the new generation inheriting prime parcels in Burgundy’s best vineyards it is an exciting time. The problem of inheritance tax, especially with current land prices, remains one of the biggest challenges for this new generation, but French laws are slowly recognising the importance of supporting this generation.
We are currently experience a new golden age of Burgundy as a result of technical advances in the vineyards and cellars combined with a healthier soil (post Claude Bourguignon) and an influx of finance and talent. Climate change is arguable the greatest worry for the region. Hail and frost have caused unprecedented havoc in the last seven years causing significant reduction of yield. Overall vintages are warmer resulting in the disappearance of the concept of a ‘bad vintage’ (was the last truly bad vintage 1994?). However, Pinot Noir is a fickle variety that does not cope well with heat. In a recent article in the World of Fine Wine, Burgundy expert Jasper Morris MW argues that ‘quality is moving slightly up the hillside, so that there is more interest in such vineyards as Taillepieds and Clos de Chênes in Volnay, or Fuées and Cras in Chambolle- Musigny than would have been the case for previous generations. However, should the effects of climate change become yet more pronounced, there is a very real danger that the Pinot grape may no longer be as well suited to the golden limestone slopes of Burgundy as it has been for the past many hundred years’.
What is Next?
January has brought around the annual Burgundy En Primeur. Whites are exceptional, while reds promise to bring great pleasure. Our full vintage report, written by Burgundy Expert Jason Haynes, can be found here. After many years of small harvests and tight allocations, 2017 Burgundy En Primeur will allow first time new collectors to secure allocations that until now have been elusive and allow the shrewd buyer to negotiate good positions ahead of 2018 Burgundy release. In May 2019, we look forward to hosting a large dinner in the historic cellars at Domaine Gouges in the heart of Nuits-st-Georges to celebrate our long-standing relationships with the Domaine as well as a host of Burgundy dinners and seminars in London.