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Third year of decline for fine wine leads to 'healthier' position

Published:  08 January, 2014

While 2013 signified the third consecutive year of falls for the fine wine market, experts say declines are smaller and the market is returning to a more balanced position.

The latest figures from Liv-ex show its Fine Wine 100 Index fell by 1.4% in 2013, in an "unprecedented" third year of decline. But Liv-ex is quick to point out that "the yearly declines are themselves declining: the Liv-ex 100 fell 14.9% in 2011, 8.9% in 2012, and 1.4% in 2013".

The Liv-ex Fine Wine 100 index shows a fall of 1.4% in 2013Liv-ex Fine Wine 100The Liv-ex Fine Wine 100 index shows a fall of 1.4% in 2013

It closed December 2013 on 257.15, down 0.5%. Meanwhile the Liv-ex Fine Wine 50 fell 1.2% in December to close the month on 239.09, a decline of 3% in 2013.

There is also more positive news as broader Bordeaux indices performed better: the Liv-ex Bordeaux 500 index fell 0.7% in December, leaving it with a gain of 0.8% for the year, while the Liv-ex Investables fell 0.4%, leaving it with a gain of 0.1%.

Graham Sumeray, former chief executive of Fine & Rare and now consultant with the Antique Wine Company, told Harpers: "The market was getting overheated, now it's much more 'back to basics'. There are still some very interesting pockets of demand, particularly from Russia and Brazil, with wines from Burgundy and Italy in demand.

He said that Burgundy prices were growing thanks to the increasing interest and scarce supply.

Sumeray said the market was in a healthier and more balanced position given the rapid growth from China had now eased off. Buyers there are showing "much higher levels of sophistication" than before, and over-inflation, as happened with Lafite, is a thing of the past.

"I don't think we're going to see price rises like we did in the noughties, 2009/10 was particularly inflated. Where prices are now there are some real value opportunities."

He said customers were now looking for physical Bordeaux rather than en primeur and that there was "much less speculation".

The changes in the marketplace mean that "a lot of the people who prospered from buying wine and sitting on it are finding things very tough indeed". He advised: "You've got to have real people selling to high net worth individuals - some people have forgotten how to do that - and you need a very strong ecommerce facility. You also need strong sourcing capability."

What are your views on the current fine wine market? Let us know by commenting below, emailing Gemma McKenna or tweeting @harperswine.