In some respects, 2013 has been a year that sommeliers would rather forget. A fairly poor en primeur campaign was followed by an even worse vintage harvest, making this a challenging year for the entire industry.

The Liv-Ex 100, Bloomberg’s fine wine benchmark, sank 1.4 per cent through the year.

Analysts and experts admit that the Bordeaux vintage of 2013 may turn out to be one of the worst vintages in recent memory. The main reasons were poor weather conditions during the harvest and a devastating hailstorm in early August, which reduced the yield.

Bordeaux 2013 vintage wines will start going on sale for en primeur (where wines aren’t yet bottled, but still maturing in their barrels) tasting this year, and the industry is eagerly awaiting the price levels at which the chateaux releases this vintage.

The two previous en primeur campaigns were rather unsuccessful too. The release prices were perceived to be too high, putting off many buyers.

With the 2013 vintage suffering from bad weather conditions and a poor harvest, a few chateaux may opt to not even release or produce any wines, as they believe the quality will not be good enough.

The ones that do plan to release their wines have suffered setbacks, as their supply will be lower than it usually is. The en primeur tasting, with world acclaimed wine critics attending, may lead to a better understanding of the quality and potential of the 2013 vintage.

The 2011 vintage which will be released within the next few months, with some chateaux already bottling their wines, is awaited, but was a write-off too.

But the 2013 vintage in comparison will produce a smaller amount than usual, which could support prices a tad. Wine, as an asset class took a back seat last year, as seen from the decline in the Liv-Ex. New legislations and restrictions on spending led to muted demand from China and Hong Kong.

Bright spots But it was not all gloom and doom for sommeliers, with the prices of certain wines continuing to rise, outperforming many other investment vehicles.

Trading volumes in the market also increased significantly which indicates that investors were keen to pick up bargains. Turnover on the Liv-Ex platform in December 2013 was up 34 per cent over last year.

Since the 2012 en primeur campaign last year, buyers have been looking for value and found it in Burgundy wines. Names such as DRC (Domaine de la Romanee Conti) were the top performers of the year. Moet Hennessy’s launch in India last year has also increased demand in the Indian market, where Champagnes currently seem to be in higher demand than ever before. Wine auction houses were also booming last year, with more fine wines sold through auctions via Christies and Sotheby’s. World record-breaking prices were being paid for fine wines in these auctions.

Wine fraud and scams also hogged the headlines last year with Rudy Kurniwan’s trial in New York receiving attention as one of history’s biggest fine wine frauds. This has led to renowned chateaux putting in place greater quality safeguards. Many have followed in the footsteps of Chateau Lafite Rothschild and are implementing security proof-tag systems to avoid counterfeiting.

Bargain deals Despite much negative press on fine wines during the past 12 months, investors are continuing to reap the rewards of this new alternative investment.

After all, what is better than a market that is depressed to find good value? Falling Bordeaux prices from last year have helped to open up the fine wine market to many new buyers.

Analysts and experts expect prices to stabilise this year. Buying now could prove to be a highly profitable long-term investment.

(The writer is the CEO of Bordeaux Traders. The views are personal)

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