Fine wine prices continue to fall, heard delegates at a conference on 2 December.
Speaking at the Global Markets Media Wine Investment Conference 2008, James Miles of Liv-ex – an electronic fine wine exchange – told financial professionals that the Liv-ex 100 Index dropped another five percentage points in November.
This follows the Index’s biggest monthly fall of 12% in October. The Index now stands at 209 compared to its record high of 260 in June.
In October, blue chip red Bordeaux posted the biggest losses, with the 2005s and other more recent vintages falling most steeply. In November though, the pattern was different.
‘Essentially, the rest of the Bordeaux market simply caught up with the downward trend,’ said Miles.
Investors and distressed sellers are liquidating their positions in the ‘dash for cash’, he said, causing prices to soften further.
‘The main victims are the most highly speculative stocks like Ausone 2005, which many people recognised were overpriced in the first place,’ said Geraint Carter of wholesale fine wine firm Bordeaux Index.
Carter argued that the recent volatility of the fine wine market is a by-product of the closer correlation between wine and equities.
‘I don’t think this increased volatility is going to go away anytime soon.’
Compared to the first – and very bullish – Wine Investment Conference in 2006, the mood was notably more circumspect, but not entirely pessimistic.
‘A lot of people are telling me that they are ready to invest in the market again. Many are not sure when exactly that time will be but they feel they are pretty close to it now.’
‘My feeling is that the recovery is not imminent,’ said Fund Manager Peter Lunzer of Lunzer Wine Investments.
‘But we could see it in the first quarter of 2009.’
Written by John Stimpfig