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Fine wine market prices hold firm, say analysts

Recent figures suggest fine wine market prices have been stable over the past year, despite wider economic uncertainty, as some merchants and auction houses report strong demand from collectors.

Many Liv-ex indices showed modest gains in 2020, led by the Champagne 50 and Italy 100 – both up by between six and seven percent versus 2019.

Against a backdrop of uncertainty, ‘the wine market has held its nerve,’ said Miles Davis, head of professional portfolio management at Wine Owners, in a report back in December. ‘Even Bordeaux prices feel like they are firming up,’ he wrote.

He told Decanter magazine’s Market Watch in January the market has shown a steady performance.

‘Following the global financial crisis [in 2008] merchants marked down prices quite drastically, but that hasn’t happened in 2020.’ Davis also highlighted Champagne as an area attracting more investors.

Liv-ex, which describes itself as a global online marketplace for the trade, reported a strong finish to 2020. Its Liv-ex 1000 index, tracking fine wines from key regions around the world, rose by 0.7% in December and was up by 2% for the year.

Yet it also sounded a note of caution, given the wider economic challenges related to the impact of the Covid-19 crisis – plus also the effect of Brexit and US tariffs. ‘As the new year begins…the robustness of the fine wine market may well be tested,’ it said earlier this month.

UK-based merchant Bordeaux Index reported strong results for 2020, with sales of $125m (£91m) and ‘a 60% increase in new account openings for [our] LiveTrade online wine trading platform’.

Gary Boom, the merchant’s founder and CEO, said he was particularly encouraged by strong trading in Asia. ‘We enter 2021 with a very positive outlook on the market, where we think Bordeaux has the chance to test new highs,’ he added.

On the auction market, Sotheby’s said buyers embraced an accelerated transition to online sales in 2020. Its total wine and spirits auction sales hit $92m (£67.6m) for the year.

Spirits is a category to watch, including rare Scotch and Japanese whiskies. ‘2020 saw phenomenal growth for spirits, which made up 20% of Sotheby’s Wine’s annual business globally,’ said Jonny Fowle, Sotheby’s spirits specialist.

The group said it would auction a set of rare Black Bowmore whiskies in Hong Kong in spring 2021, with proceeds going to charity.

Acker said auction sales hit a record $122m in 2020, up 32% on 2019, with total auction and retail sales at $143m.

Top Burgundy helped to drive the results; wines from the region made up 56% of dollar sales at Acker auctions last year. Bordeaux accounted for almost 23% of auction sales by value (US$).

Liv-ex numbers for 2020 again highlighted how the market has broadened in the past decade. Bordeaux’s share of trades on Liv-ex dropped to 42% in 2020, down from 54.4% in 2019 and compared to a share of more than 90% back in 2010.

This is an extended and edited version of an article written for Decanter magazine’s Market Watch. Updated on 28/01/21 to clarify that the Bordeaux Index total sales figure was reported in US$, not pounds sterling.

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