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Fine wine declines in October shows we’ve not reached the bottom yet

The acceleration in the decline in the Liv-ex 1000 during October show that the fine wine market hasn’t yet bottomed out, despite August and September’s figures raising hope of stabilisation.

The data from October showed the Liv-ex 1000 – the index that gives the broadest view of the market – saw a 1.4% decline, steeper than the 1.0% recorded in September and August, with the Liv-ex 100 also seeing deeper drops, of 2.1%, while the Liv-ex 50, which charts the movement of First Growth, saw a decline of 1.9%. Even the Champagne 50  – which until last year was showing good growth – recorded a substantial decline of 2.5% and the only index to show a month-on-month increase was the Rest of the World 60, Liv-ex said, with a modest gain of 0.2% in October, driven by wines from California, the second month is has increased.

“Last month, the volatility across difference indices and the positive movements recorded by some hinted at the possibility of the market finding a bottom, However October ruled that out for now,” the report said.

Trading value of wines was also down on the market price, it said , with wines on the Liv-ex 100 trading on average 3.05% below market price, down from 1.73% last month, although wines on the Liv-ex 1000 traded an average of 2.55% below the market price in October, compared to 3,19% the previous month.

In the year-to-date, all the sub-indices of the Liv-ex 1000 have recorded month-on-month declines, it noted, with the Liv-ex Bordeaux 500 down in the year-to-date by 9.3%, the Burgundy 150 down 14.1% and the Champagne 50 down 15.3%. Italy recorded the lowest fall at 5.7%, with the Rhone the greatest at 18.1%.

However, it should be noted that over the last 2 years, there has been modest growth in the Bordeaux Legends 40 index (1.9%) and Italy 100 (6.7%), and strong double-digit growth in the Burgundy 150  (16.4%) and Champagne 50 (15%), while the Liv-ex Bordeaux 500 is up 6.3% over a five year period, and the Rhone up 4.1% and the rest of the world by 8,7%.

For more information on the prognosis for q4, read our analysis here

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