California's rapid rise on the fine wine investment scene has continued in 2018, backed by a run of good vintages, according to fresh figures from Liv-ex and BI Wines & Spirits.
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BI merchant says sales of US wines doubled in H1
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Liv-ex launches California 50 index to better track price rises
BI reported this month that sales of US wines rose by 96% in the first half of its financial year, versus the same period of 2017.
That wasn’t enough to dislodge mature Bordeaux and vintage Champagne among the merchant’s best sellers, but it is more evidence of California’s emergence on the fine wine investment scene. US and ‘rest of the world’ wines accounted for 10% of BI sales by value in the six-month reporting period.
‘This buying trend is predominantly due to collectors having better knowledge of the ultra-high end, boutique producers across California and becoming more open to trying out new world wines,’ said BI.
A run of good vintages from 2012 to 2015 has also propelled sales, notably the particularly ageworthy cache of California 2013 wines.
Coming soon to Decanter Premium: A full vintage report and tasting notes on California 2015 wines
California 50 index launched
Price inflation for California’s top names has accelerated in recent years and has bridged a gap with several top names in Burgundy and Bordeaux, according to Liv-ex analysis.
Its newly launched California 50 index tracks the last 10 physical vintages of the five most traded Californian wines on the Liv-ex platform, currently including:
- Screaming Eagle
- Opus One
- Dominus
- Harlan Estate
- Ridge Monte Bello
If this index had been running since 2003, historical data shows that its value would have tripled in the last 15 years, Liv-ex said. It added that the California 50 wass the best performing Liv-ex indices in the past 12 months, up by 15.8% since July 2017.
How the top California wines have caught up with European greats
How the Liv-ex California 50 index caught up with the pack. This chart shows price data back to 2003. Credit: Liv-ex.
Where the comparison dissipates is in the market share.
California as a whole accounts for just 3.7% of Liv-ex trades by value, albeit up from 2.8% last year, according to the platform.
Is there a California price bubble?
‘There doesn’t seem to be a bubble in Californian wines specifically,’ said Liv-ex research analyst Edward Jackson. ‘The California 50 index has risen steadily over the past decade, which suggests that this is not the case.
‘If there were to be any price instability for California wines, it would most likely be in the context of a general shift that affects the whole fine wine market. However, we are not in the business of predicting this.’
Top performers
Liv-ex recently highlighted Dominus 2014 as a strong performer on its index, while the release of Opus One 2014 last year was also well received by the market, according to several merchants contacted at the time.
A 43-bottle lot of Screaming Eagle Cabernet Sauvignon was last year the biggest seller at a Sotheby’s Hong Kong auction, fetching 1.16 million HK dollars (US$149,007).
Wine-Lister also highlighted Vérité’s ‘Le Désir’ as one of 10 ‘buzz brands’ in analysis published in June 2018.
