Liv-ex records ongoing stagnation in fine wine market
Exchange platform Liv-ex has recorded a slump in the demand for luxury labels in recent times, as all its major indices show declines on a month-on-month and year-to-date basis.
According to Liv-ex, its key metric for measuring the buoyancy of the market (Liv-ex Fine Wine 1000) experienced a significant decline of 2.4% in May, closing at 457. This marks the index’s largest month-on-month decrease in the past seven months.
Meanwhile, the Liv-ex Fine Wine 100 fell a further 2% in May following the decrease seen in April, to close at 405.68.
“Of the 100 wines that make up the Liv-ex 100 index, the majority experienced price declines, with 79 wines seeing their prices fall, while 21 rose. Year-to-date, the index is down 3.3%, “ said a representative from Liv-ex.
Meanwhile, last month saw the launch of the annual Bordeaux En Primeur campaign.
Liv-ex said: “The market was already very cautious after a 7-year period of rising prices and a macro economic environment (rising interest rates, slowing growth) that was taking the wind out of the sails of many asset classes. As the Bordeaux releases began to emerge at prices far higher than anticipated (or wanted), the secondary market felt the chill. Prices fell across all regions in May as buyers retreated.”
Liv-ex added that the 2022 Bordeaux En Primeur campaign “felt pedestrian”. The organisation noted that “only 25% of the top wines have been released so far, and if there is any insight to be gained from the releases so far, it is that buyers won’t buy the 2022 vintage at all costs, no matter how critically-acclaimed it is.”
An analysis of 111 wines, released June 1, showed that overall, the wines’ ex-negociant prices increased by 11.5% on average from 2021 to 2022. Their UK release prices showed an even higher overall average increase of 15.6% due to the weaker Sterling.
However, older vintages of Bordeaux are showing more resilience. The Bordeaux 500 only fell by 1.3% this month, and its year-to-date performance has been the most resilient of all the sub-indices, with a decrease of only 2.0%.
“With this uncharacteristic volatility in the market, it is perhaps unsurprising that the trade has been quite risk-averse year-to-date. The steady price action and rising trade for Bordeaux’s wines might suggest that buyers are returning to more familiar regions known for their stability and liquidity.”
All Liv-ex indices are calculated using the company's mid-price; the mid-point between the highest live bid and lowest live offer on the market.
These are the firm commitments to buy and sell at that price; transactional data rather than list prices. It represents the actual trading activity of 620 of the world’s leading fine wine merchants.
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