Fine wine market ends 2013 on a low

A malaise hanging over Bordeaux means the fine wine market spent of much of 2013 in the doldrums, and the early outlook for 2014 is subdued.

The Liv-ex Fine Wine 100 index, which tracks the world’s 100 most sought-after wines, declined for an unprecendented third straight year in 2013, finishing on 257 versus 261 a year ago.

After an increasingly familiar ‘false dawn’ early in the year, shoots of newfound optimism among merchants were dashed as Bordeaux’s Left Bank continued to appear concussed by its fall from the peak of 2010 and early 2011.

This overshadowed stronger performances from Right Bank wines, as well as Champagne, Burgundy and Tuscany, according to a Liv-ex market review published in December.

Figures produced by Liv-ex earlier in the month showed that, on average, investors who have bought Bordeaux en primeur in the past four vintages, spanning 2009 to 2012 inclusive, would lose money if they tried to sell now.

The data makes ominous reading as Bordeaux heads towards an en primeur campaign for the 2013 crop, which looks almost certain to go down as one of the trickiest growing and harvest seasons in the past couple of decades.

Top chateaux will have been highly selective and could still produce small quantities of very good wine, one senior negociant said in the revamped ‘market watch’ section of Decanter magazine’s newly-released February edition. But, he added that en primeur prices at many estates will probably need to fall to attract buyers.

Liv-ex analysts have warned investors not to expect any bounce from en primeur 2013, although one potential silver lining is that, ‘with expectations so low going into 2014, there is scope for positive surprises’.

Outside of Bordeaux, investor demand continued to build around Burgundy in 2013, with no suggestion of a slowdown for Domaine de la Romanee-Conti. To a lesser degree, super-Tuscan wines and vintage Champagne also did well.

In 2010, Bordeaux accounted for 95% of trades by value on Liv-ex, compared to 82.6% last year.

Written by Chris Mercer