Haut Bailly 2005 Approaches Three-Year Low as Liv-Ex 50 Declines

A case of 2005 Chateau Haut Bailly, a wine estate in Pessac-Leognan south of Bordeaux, fetched 600 pounds ($992) on Liv-ex this week, 17 percent down from its 2011 peak as the region’s benchmark wine index fell for a third year.

While the vintage trades only sporadically on the exchange, the deal on Dec. 31 was below the level of other transactions over the previous two years and was the lowest price registered for Haut Bailly ’05 on Liv-ex since a case sold for 590 pounds in June 2010, according to the exchange’s Cellar Watch website.

The Liv-ex Fine Wine 50 Index tracking top Bordeaux wines fell in December for the eighth month in the past nine, bringing the decline for 2013 to 3 percent, according to Liv-ex data. That compared with drops of 9.7 percent in 2012 and 17 percent in 2011 as investors, deterred by prices of recent vintages, either shunned the market or sought to diversify.

“The few still around who worked in the wine industry during the 1970s do not recall the post-oil crisis fine-wine slump being nearly so protracted,” Will Beck, partner of London-based Wine Asset Managers LLP, said in a market report. “There is an awful lot of bad news in the price.” The fund has $20 million under management.

Auction Trading

A case of Haut Bailly 2005 sold for as much as $1,314.50 at a Hart Davis Hart Wine Co. auction in Chicago in October, while two cases sold at auctions in September, one at a Hart sale in San Francisco for $1,195 and another at Sotheby’s in London for 611 pounds.

The vintage is still selling for 35 percent more than the 445 pounds a case at which it traded in June 2006, after it first came to market.

The 2005 Haut Bailly is the estate’s third-most expensive of the past 10 years, after the 2009 and 2010 wines, according to merchant data compiled by Liv-ex. It was rated 95 on a 100-point scale by U.S. critic Robert Parker in an online tasting note in April 2008, putting it among the vineyard’s top five in the decade.

Chateau Haut Bailly traces its wine-growing history back more than 400 years, and has 30 hectares (74 acres) of vineyards. Apart from a four-hectare plot of old vines, the bulk of its land comprises 64 percent Cabernet Sauvignon grapes, 30 percent Merlot and 6 percent Cabernet Franc, according to its website.

The estate was bought in 1998 by Robert Wilmers, chairman and chief executive officer of Buffalo, New York-based M&T Bank Corp. It is managed by Veronique Sanders, a descendant of Daniel Sanders, a Belgian wine merchant who restored the property after acquiring it in 1955.

Haut Bailly is close to another Bordeaux wine estate with U.S. connections, Chateau Haut-Brion. That vineyard, classified as a first-growth in 1855, was bought in 1935 by U.S. financier Clarence Dillon and is still owned by his family, as is nearby Chateau La Mission Haut-Brion.