Margaux ’05 Drops to 17-Month Low as Liv-Ex 50 Index Declines

The 2005 vintage of Chateau Margaux, a Medoc first-growth wine estate, fell to a 17-month low of 5,200 pounds ($8,600) a case on Liv-ex in the past month as the London-based market’s Fine Wine 50 Index extended its decline.

The trades, on Dec. 20 and Dec. 24, were 13 percent below the high for last year of 5,950 pounds in March and 35 percent down from the 8,000 pounds a case at which they traded in July 2011, according to data on Liv-ex’s Cellar Watch website. They took the vintage to its lowest level since July 2012.

The Liv-ex Fine Wine 50 Index tracking top Bordeaux wines has fallen about 10 percent since mid-March, eradicating an 8 percent gain in the first 11 weeks of last year, as investors, deterred by prices of first growths, have diversified to other regions. The Liv-ex 50 fell 10 percent in 2012 and 17 percent in 2011, after gaining 11 percent in 2010.

“At the risk of sounding repetitive, we must be very close to the bottom of the cycle,” Will Beck, partner of London-based Wine Asset Managers LLP, said in a market report. The fund has $20 million under management.

The 2005 Margaux ranks as the estate’s third most-expensive wine of the past 10 years, behind only the 2009 and 2010 vintages, according to merchant prices collated by Liv-ex on its Cellar Watch website.

Estate Purchase

The vintage was awarded a 98+ rating on a 100-point scale in an April 2008 tasting note by U.S. critic Robert Parker, putting it among the top four of the past 10 years on that measure, according to the website.

Greek retail magnate Andre Mentzelopoulos bought Chateau Margaux, whose wines have been sold in London since the early 18th century, in 1977. It has been run since his death in 1980 by daughter Corinne.

The estate has 80 hectares (198 acres) planted with red-grape vines of Cabernet Sauvignon, Merlot, Petit Verdot and Cabernet Franc and 12 hectares with white Sauvignon Blanc.

It produces an annual average 130,000 bottles of its main wine, a similar quantity of Pavillon Rouge du Chateau Margaux and 15,000 bottles of white Pavillon Blanc, according to its website.

The vineyard is on the left bank of the Gironde estuary and ranked among the top Medoc first-growth estates in the classification drawn up for Napoleon III’s 1855 Paris Exhibition, which remains in force.