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Saturday 25 October 2014

Winds of change in the fine wine market?

28th July, 2014 by Rupert Millar

The Liv-ex Fine Wine 50 has held steady for the past few weeks and July is set to be one of the strongest months of trading this year – are things finally looking up for the fine wine market?

Pessimism or optimism.Liv-ex noted on its blog that “good engagement” from its members was likely to make July the second strongest month of trading so far this year – a good result in what is one of the quieter parts of the year though also indicative of the generally lacklustre trading conditions at present.

Last week’s share of trade by value was still dominated by Bordeaux but its share was below 80% – again reflective of the wider market’s trend.

Burgundy though was up to 11% with Champagne and Italy the next strongest performers.

Bouchard Pere et Fils 2001 Romanée was the week’s leading wine by value, taking 8.3% of the total value, the rest being 2009 Mouton, 2003 Latour, 2011 Lafite and 2010 Margaux.

By volume meanwhile, 2005 Lagrange Saint Julien (at £465 a case) was the leading label, taking 6.2% of the total, with 2008 Duhart Milon close behind on 6%.

Sassicaia’s 2009 also saw “good activity” and it took third place for trade by volume.

The fine wine market has been in free fall for over a year now, month after month of decline, weighed down by by the wavering fortunes of Bordeaux (a situation at least partially attributable to the Bordelais themselves).

There have been other encouraging signs of late too. The market for “under-the-radar” Lafite such as the 2011s is strong and there is increasing value in non-first growth 2009 Bordeaux as its price declines.

There may be no immediate “sea-change” but, perhaps, there are “signs of optimism”. We shall have to wait and see.

One Response to “Winds of change in the fine wine market?”

  1. James Wilson says:

    When I read that Goedhuis had called the bottom of the market a month ago I realised that we had further to go down. After a brief upwards blip the downward trend has resumed in earnest in the last couple of weeks. And make no mistake, we have plenty further to go down. There is a still a huge overhang of weak speculative holders of fine wine all over the world – but especially in the UK and China. There are also significant wine fund liquidations underway and still to come. But the bottom line is this … when did you actually even SEE a First Growth on a restaurant table? When did a friend last invite you round and popped a Leoville las Cases to quoff over a chat? Thought not …. Until we actually get to the point where at least SOME people start to buy wine at these prices to actually drink it the market will keep going lower. We may not be a million miles away now, with a lot of prices halving in value in 3 years, but we aren’t there yet … whatever merchants like Goedhuis or Liv-ex would like you to believe.

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