Romanee-Conti ‘Vulnerable’ as Bordeaux Shows Value: Miles

Prices of Domaine de la Romanee-Conti Burgundy have risen so much that investors may turn back to premium Bordeaux, according to James Miles, co-founder and managing director of the Liv-ex exchange.

Romanee-Conti, which has a wine-making history of more than 400 years, has reached more than $10,000 a bottle for some vintages. It has outperformed Bordeaux first growths “by 100 percent since the peak of the market” in mid-2011, Miles said in an interview in London. “Prices of Domaine Romanee-Conti are looking a bit vulnerable.”

By comparison, many Bordeaux are back at levels where they were trading after the 2008 collapse of Lehman Brothers Holdings Inc., Miles said. “Bordeaux is actually starting to look quite interesting because the first growths are 40 percent off their highs,” he said. “There’s lots of signs of value.”

While any recovery in Bordeaux first growths will probably be slow, there are signs it may be starting, with the Liv-ex Fine Wine 100 Index gaining for the past four months after a 16-month slide, Miles said.

Meanwhile, “although prices have remained stable in 2014, activity on Liv-ex in Domaine Romanee-Conti wines has fallen by about 60 percent, so my suspicion is the professional buyers are slightly losing interest,” he said.

Investment Performance

Still, the Liv-ex 50, a narrower index more focused on recent Bordeaux first growths, has fallen for 10 out of 11 months this year.

The Liv-ex market has more than 440 members in 35 countries and its indexes have become a benchmark against which wine investment managers measure performance.

Hong Kong

Auction prices for top Burgundy also remain buoyant.

On Oct. 4 a unique lot of 114 bottles of Romanee-Conti DRC sold for a record HK$12.6 million ($1.6 million) at Sotheby’s in Hong Kong, equivalent to about $14,000 a bottle. The collection, spanning 1992 to 2010 with six bottles from each vintage, was purchased by an Asian buyer who wasn’t identified.

That Hong Kong sale broke a previous auction record for a wine lot, set by Sotheby’s in 2006 with Bordeaux when 50 cases of Chateau Mouton Rothschild 1982 sold for $1.05 million in New York, according to a company statement.

The Romanee-Conti estate in Vosne-Romanee near Nuits-Saint-Georges exclusively makes grand cru wines, the top tier in the region’s classification above premier cru labels and the more widespread village-based appellations.

Domaine de la Romanee-Conti includes vineyards such as La Tache, Richebourg and Echezeaux as well as Romanee-Conti itself, which forms the core of the estate. The property acquired its present name in the 18th century when it was bought by the Prince de Conti.