Fine wine prices are at 18-month low, according to recent figures from Liv-ex.com.
The Liv-ex 100 Fine Wine Index fell 12.4% in October with highest-end wines being hardest hit.
Worst affected was Lafite Rothschild 2004 - down 27.9% - with 2005 and 1995 falling 24% and 22.5% respectively.
Chateau Montrose 2003 fell 23.1%, while a case of Chateau Ausone 2000 fell to £12,200, down 21.7% from £15,575 in October.
In contrast, the Liv-ex 500, which tracks a far wider universe of wines including a majority of Bordeaux but also wines from Burgundy, the Rhone, Champagne, Port, Italy and the New World, was only down 1.8% in the month.
The Index, which represents the price movement of 100 of the most sought-after fine wines, has fallen 16% since its peak in June this year.
Jack Hibberd, research manager at Liv-ex, told decanter.com that 'wine prices are affected by dramatic events, people have had to adjust. Wine was resilient until October but the market is not immune.'
The drop in the market coincided with the £625bn bail out of British and American banks and the emergency half-point cut in interest rates in October.
'Undoubtedly, the market will recover. Following a period of wealth creation, this drop has brought the market back closer to long-term trends,' said Hibberd.
'It's now a buyer's market. Good wines are available at good prices and have come back into the buyer's remit. In the short-term traders may be cautious, but others will see it as an opportunity. There are some good deals available.'
From October 2008, the Liv-ex Index year to date trade is down 7.6% and the year on year change is down 7.4% to 221.62 from 239.27 in Oct 2007.
Early indications before new figures are released at the end of the November show the Fine Wine Index has stabilised in the last two weeks.
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I thought it'd drop you a few lines regarding the headline "Fine Wine Prices hit new low" which we feel is inaccurate and misleading to your readers and our customers.
As you know, Farr Vintners sells more Bordeaux wine than anyone else in the UK and I think that we are better qualified to comment on prices than most people. First of all, I would say that the vast majority of Fine Wine has not seen any price decreases at all. Indeed, with the strong euro, many prices have risen recently and demand remains stronger than supply for most of the popular clarets such as Lynch Bages, Gruaud Larose, Beychevelle, Grand Puy Lacoste etc etc.
Where there has been price volatility is really only with very recent vintages of the First Growths and Super Seconds that had previously been heavily purchased by city-based investment funds. These are wines that have rocketed in price in the last 18 months and are now stabilising and finding their place in the market again. However, to suggest that prices have hit a new low is nonsense.
I will take the example of the wines mentioned.
Montrose 2003 - 18 months ago (May 2007) this wine was selling at £1100 - it rose to £1800 in the spring of 2008 and has now dropped back to £1700. We expect that it might settle at around £1500 but that would still be a 35% price rise in 18 months.
Lafite 2004 - 18 months ago (May 2007) this wine was selling at £1800 - it rose to £3000 and has now dropped back to between £2500 and £2900 but again is still considerably up in price over 18 months.
Ausone 2000 - 18 months ago (May 2007) this wine was selling at £11000 and today the cheapest price in the market is £14400.
The most price-volatile wines in the market today are the 2005 First Growths. Chateau Margaux 2005 was released at £4500 en primeur, was £5500 in May 2007 and reached a peak of £9800 before falling back to the current level of £7800 (cheapest price in the market) which is still 40% above the price of 18 months ago.
The present woes in other financial markets have not been reflected nearly as much in the fine wine market. This proves, once again, that fine wine investment is historically less risky than, for example, the stock market. However, with some vendors being forced to sell their wines because of money problems caused elsewhere now is very much a buyer's market and there are some good deals to be had by the canny buyer .
Stephen Browett, Farr Vintners, London, UK
As ever, Stephen's analysis is on the nail and we would echo them. As a further aside it is worth noting that Liv-ex's results can, at times like these, be distorted as a result of panic or forced selling by overstocked trade members reducing inventory, perhaps and especially ahead of year end positions. Their prices and trends sometimes therefore do not accurately reflect the real market.
Having said that, it is true that the market has softened with especially some investment grade wines (05 1st Growths for example) having certainly come off the top and there are stocks 'looking for a market'. The interesting bit is that buyers are out there. Mark Bedini, CEO, Fine & Rare
Stephen Browett is, as ever, absolutely correct. Fine wines prices have not, as you suggest, hit a 'new low' - though there has undoubtedly been a retrechment in prices for recent vintages of what have been considered the most investment-worthy wines. But even for these wines, we are talking about prices falling back to their level of a few months ago. Moreover, such falls in prices as we have seen are almost certainly a problem produced by a surfeit of supply rather than a deficit of demand - with those suffering elsewhere in their investment portfolios seeking to cash in on their profits in the fine wine market. This is likely to be a temporary phenomenon. Wine is undoubtedly a good investment vehicle in the current climate. Unlike the housing market, for instance, the vast majority of prices have not fallen and the volume of transactions remains high. With some forced to sell (because of shortfalls in their investment portfolios elsewhere), now is actually a very good time to be buying. Professor Colin Hay, Macclesfield
Please do not believe those that have a vested interest in selling wine as an investment.
As a grower in Bordeaux I can tell you that there are many worried people. This year chemical costs are well up, labour is lazy so productivity is poor and there is plenty of stock in everybody's cellars.
I can see prices falling by another third in the short term. Then in April 2009 who is going to buy then?
Hold off and watch until after the new year.
Barrie Hoar
As a client portfolio manager at FirstGrowthBordeaux wine brokers, Westminster, I am first hand witnessing an influx of buyers into this market. Prices are certainly softening, they have come down on the ''05 First growths marginally but this is of little concern to the investor of 2009. Buyers of ''05 First Growths at the moment are investing at a stable level in the knowledge their wine will do a solid 10-15% annually over the next 5 years. The bottom line is, no shrewd investor in classic recent vintages should ever sell this year, in 3 years time when the dust of the recession has settled and the emerging markets are stronger than ever, the 2005's will be worth a fortune. With a finite supply of this classic vintage and a massive global demand, this perishable asset will do very well for the investor of 2009. This year undoubtedly will see little movement for the top Bordeaux chateau but it must not be forgotten 2005 is the finest vintage in 30years , its surpassed the 1982 already. My advice to potential investors is to open a portfolio with some strong 2005's while prices remain steady, your movement and returns will become abundant in the years to follow.
Timothy M Block
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I thought it'd drop you a few lines regarding the headline "Fine Wine Prices hit new low" which we feel is inaccurate and misleading to your readers and our customers.
