Get our daily fine wine reviews, latest wine ratings, news and travel guides delivered straight to your inbox.
You are now subscribed
Your newsletter sign-up was successful
An account already exists for this email address, please log in.
Wine investment: Falling rates to boost activity?
Recent analysis has suggested little prospect of a swift upturn on the fine wine market in early 2024, but lower prices may present opportunities for astute buyers.
Last year was challenging for the fine wine market. Prices dropped by some 12% overall, said UK-based merchant Bordeaux Index in a January 2024 report.
That said, its transaction data showed prices were broadly flat over a two-year period and still up 18% versus three years ago (see chart 1, below).
Liv-ex, a global marketplace for the trade, reported in January that ‘bearish momentum and increased volatility’ on its Liv-ex 1000 index suggested a downward trend would continue in the short-term. The index, calculated monthly, dropped 13.6% in value in 2023, and fell by 0.7% in December.
(Image credit: Credit Unknown)
Bordeaux Index said market sentiment was ‘reasonably neutral’, with limited selling activity. ‘Historical trends support market prices likely having reached a bottom point, and this is our base case,’ it said. However, it didn’t expect an upturn in the first quarter of 2024.
A number of trade sources have mentioned potential opportunities for buyers. Wines from Bordeaux, Burgundy, Italy and Champagne, for example, were trading below the market price, on average, on Liv-ex in the fourth quarter of 2023.
Three Bordeaux 2017 wines were among the top-traded labels on Liv-ex in the second week of January 2024, but the platform said some transactions were below en primeur release prices (see chart 2, below).
Bordeaux Index said the rapid interest rate rises of 2023 may have dampened fine wine market trading. Speculation about rate cuts in 2024 is potentially significant.
Decanter newsletter
Get our daily fine wine reviews, latest wine ratings, news and travel guides delivered straight to your inbox.
UK-based Cult Wine Investment, part of the Cult Wines group, said interest rate cuts, combined with lower prices, could help to increase wine market activity in 2024, ‘potentially rejuvenating the landscape and building momentum heading into 2025’.
(Image credit: Credit Unknown)
The Bordeaux Index view
Fine wine & spirits specialist Bordeaux Index kindly sponsors this section of Decanter, and provides its view on the market here every issue. It can be found at bordeauxindex.com
For fine wine, after such a strong run (especially for Champagne [+69%] and Burgundy [+58%]) across 2021-2022, a settling of activity and prices was to be expected in 2023, certainly looking at historical trends.
However, the year overall saw a decline in market activity far beyond our initial expectations and this meaningfully impacted prices, especially in the second half.
Champagne, young Bordeaux and some Burgundy pockets were most affected. The market overall was down 12% across 2023.
Looking ahead to 2024 in the fine wine market, we note that November and December 2023 seemed more stable, and with more resilient demand pockets than we saw during Q3. Historical trends suggest that market prices are likely to have reached a low point, and this is our base case. If prices have settled at this level, the question becomes when will things turn upwards: something we think lies beyond Q1. In the meantime, there will be some interesting opportunities to buy in certain regions such as young to middle-aged Champagne, certain top Burgundies and oversold key Bordeaux wines, especially older vintages.
Chris Mercer is a Bristol-based freelance editor and journalist who spent nearly four years as digital editor of Decanter.com, having previously been Decanter’s news editor across online and print.
He has written about, and reported on, the wine and food sectors for more than 10 years for both consumer and trade media.
Chris first became interested in the wine world while living in Languedoc-Roussillon after completing a journalism Masters in the UK. These days, his love of wine commonly tests his budgeting skills.
Beyond wine, Chris also has an MSc in food policy and has a particular interest in sustainability issues. He has also been a food judge at the UK’s Great Taste Awards.
