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Wine investment: Reality check for fine wine in 2023
Fine wine prices have fallen back in 2023 following a period of strong gains, suggests market data, even if some auction houses have reported solid buyer demand.
It’s been a relatively subdued year for the fine wine secondary market. Key indices at Liv-ex, a global marketplace for the trade, were down in the first 10 months of 2023. The Liv-ex Fine Wine 1000 index dropped 11.7% in 10 months to 31 October, amid declines across most regional sub-indices, including: Rhône 100 (-18%), Champagne 50 (-15%), Burgundy 150 (-14%), Bordeaux 500 (-9%) and Italy 100 (-6%).
Matthew O’Connell, CEO of the LiveTrade trading platform at Bordeaux Index, said he saw prices down by about 5%-10% year-on-year in general. Mainly, though, it’s just been quiet. ‘Trading activity on the fine wine market has been extremely muted.’
Market headwinds have continued to swirl. ‘With Chinese demand sidelined and higher interest rates weighing on stock holding strategies, both at the merchant and collector level, risk aversion remains pervasive,’ said Justin Gibbs, deputy chairman and exchange director of Liv-ex, in October.
‘Buyers have the upper hand,’ said Liv-ex. Some buyers appear to have tested sellers’ resolve on price. Dom Pérignon 2013 was one of the most traded wines on Liv-ex and LiveTrade year-to-date, but both platforms showed its price has dipped.
The long view
Recent declines have not completely eroded previous gains, particularly for blue-chip Champagne and Burgundy. Some analysis suggests a cyclical rhythm to the market, too.
The Liv-ex 1000 index has broadly grown over two decades, with relatively short eras of decline, showed analysis of the index by Bordeaux Index (see chart below).
Auction buyers waiting for the right moment
Major auction houses have still reported some strong sales this autumn.
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Nick Pegna, global head of wine and spirits at Sotheby’s, told Decanter recently: ‘There are a lot of collectors who are waiting on the sidelines looking to pick up things that feel well-priced.’ Super-rare wines still ‘make people sit up and take notice’, he added.
Auction house Zachys said after its September sales in Hong Kong and New York: ‘Global demand for white Burgundy, top Bordeaux and Champagne continue to defy the wider market sentiments.’
Please note that the horizontal axis in the chart below begins at September 2023 (far left) and runs back to September 2004 (right).
(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
The wine market has seen particularly depleted activity in 2023, with this stagnation increasing as the year has progressed. Asia is perhaps the most impacted market, but US and UK & Europe are also substantially down in trading terms. This lower activity has really been the defining feature of the year, rather than prices which are softer by around 8%-9%, very much within the range of historical trends.
No wine region has been unduly affected in price terms but at the same time there have been few beneficiaries. Champagne has moved slightly more than other regions but only assessed against the highest trading points from 2022, which had seen 12 months of sharp upwards price movement. Only a couple of niche segments such as grower Champagne have performed positively.
The history of the wine market is one of substantial price rises followed by consolidation with slightly softer prices. What we have seen in 2023 so far fits with this pattern, so unless we see a significant price deterioration from current levels, our base expectation is that prices are likely to stabilise before resuming an upwards trajectory – whether during 2024 or not is, of course, a harder question.
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.
