Domaine de la Romanée-Conti is unarguably one of, if not the, finest wine producers in the world. The wines are rare and sought-after, often fetching high prices at auction.
Since 2015, trading prices for DRC wines have increased significantly. The most recent data from Liv-ex shows that the average price of a DRC wine has 40.6% over the last year
The chart above shows the historical relationship between the Liv-ex Fine Wine 50 tracking the average prices of the First Growths, and the DRC index.
The grey lines represent the highs and lows of the DRC index. These are often referred to as the ‘Bollinger Bands’ although they have no relationship to the Champagne brand.
‘Bollinger Bands are used to assess the volatility of an asset’s price over time. The wider the band, the greater the volatility.
When these lines contract, they create what is known as a squeeze pattern. This squeeze pattern is an indicator that prices are about to move higher.
As you can see, DRC prices are currently at the upper end of their recent price range. This is not unusual for fine wine; prices tend to move in cycles with peaks and troughs. However, what is unusual is the size of the recent price increases and the consistent rise in DRC prices.
In the last year alone, DRC prices have risen 16.9%, while the Fine Wine 50 has risen just 2.9% over the same period.
What does this mean for buyers?
With the DRC prices refusing to peak, it is becoming increasingly difficult for buyers to find good value for money.
There are still some great deals to be found, but they are becoming harder and harder to find. Increasingly buyers are looking to the relative value offered by the First Growths and other top Bordeaux wines.
The First Growths offer great value compared to the DRC, with some of the top wines such as Lafite Rothschild, Latour, and Mouton Rothschild offering comparable quality at a fraction of the price.
DRC still on the rise
While the speculation is that Domaine de la Romanée-Conti is becoming overpriced, the DRC wines continue to be some of the most sought-after in the world. The combination of high demand and limited supply has resulted in prices that have been steadily rising for years, and shows no signs of slowing down.