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Global headwinds hit fine-wine market

Published:  11 December, 2019

Uncertainties in global trade have hit the fine-wine market, according to the 2019 report from Liv-ex, the online global trading platform for wine.

Among the platform’s principal indices, the Liv-ex 100 fell 2.5% in the year to 30 November, with the Liv-ex 50, which tracks First Growths, was down 3.6%.

Headwinds impacting on the performance of the indices, which are denominated in sterling, include

Brexit, US tariffs on EU goods, rising tensions between the US and China, and the volatile political situation in Hong Kong, the report concludes.

Among the sub-indices, the Bordeaux Legends 50 and the Burgundy 150 were hardest hit, down 6.3% and 7.3% respectively. Burgundy’s decline comes after hitting an all-time high at the close of 2018 and outperforming both global equities and gold.

Gold – another tangible, safe-haven asset sometimes regarded as a comparable investment to fine wine – has risen 14.3% over the same period.

The Italy 100 – up 4.6% – and the Champagne 50 – up 2.2% – were the only two sub-indices to buck the downwards trend.

Both regions have seen particular interest since the introduction of US tariffs in October and both currently have 11% market shares.

Bordeaux’s market share continues its long-term decline, hitting a record low of 45% in August to recover to 55% by year end. However, that still reflects a 4% fall on its 2018 share of 59%.

Despite the overall turbulence, the global market for fine-wine trading continues to add liquidity. The total value of bids and offers on Liv-ex broke through the £70m barrier for the first time in July 2019, while the number of active markets rose above 14,000.

The full report is available here.