Fine wine market sees Q3 decline

By James Bayley

Published: 23 October, 2024

The fine wine market continued to face challenges in Q3 2024, as prices dipped for another consecutive quarter. According to Wine Cap's Q3 2024 Fine Wine Report, the market has been in decline since late 2022, with an average drop of 4% in the latest quarter.

Bordeaux wines experienced the steepest drop, with prices falling by 4.4% in Q3. The region’s struggles were driven largely by weaker performance in key indices, such as the Second Wine 50 and Right Bank 50, which fell 6.6% and 4.6%, respectively. Despite steady demand, Bordeaux has now returned to its 2021 pricing levels, with many previously appreciating wines seeing their values revert to original release prices.

In contrast, Champagne offered a rare bright spot in an otherwise difficult quarter. Prices for Champagne edged up 0.4%, buoyed by strong returns from brands like Dom Ruinart Blanc de Blancs and Taittinger, both of which have posted gains exceeding 30% over the past six months. Krug Vintage Brut 2004 stood out as the best-performing wine year-to-date, with a rise of 21.6%, reflecting continued investor interest in select Champagne labels.

Read more: Virgin Wines reports improved profitability amid challenging market conditions

While Bordeaux’s decline might have dominated headlines, other regions also experienced downturns, albeit to a lesser extent. Italy and Burgundy both saw price drops of 2%, while the Rhône was slightly more stable, slipping just 0.8%. Despite these declines, there was renewed attention on certain back vintages that are now perceived as offering better value, with prices reflecting market corrections.

Meanwhile, recent auction results suggest there is still robust demand for rare and high-profile wines, particularly from Burgundy. Some producers have even seen their wines set new records, which points to continued collector interest in premium wines, despite broader market challenges.

As prices across most regions fell, the report observed that certain brands and vintages outperformed, indicating the importance of strategic investment decisions. Wines from Krug, Domaine du Pégau, and Sassicaia led the list of top performers in 2024, showing double-digit gains. Additionally, Spanish wines such as Vega Sicilia Único have shown increased demand, reinforcing the need for a selective approach in this fluctuating market.

For some investors, the current market environment could present buying opportunities, especially for those seeking to acquire well-regarded brands at more favourable prices. The report also noted that the recent retrospective of Bordeaux 2009 and 2010 vintages by wine critic Jane Anson, which saw nine wines awarded perfect 100-point scores, may drive renewed interest in these classic years.

The global economic climate showed signs of improvement during the quarter, partly driven by central banks shifting towards interest rate cuts. The US Federal Reserve led this movement, with its first rate cut since 2020, and similar actions by other major banks followed. These developments helped global markets rebound from turbulence earlier in the year, offering a more optimistic outlook for investors across various sectors, including fine wine.

The French wine harvest, projected to be down 22% from last year, adds another layer of complexity. Reduced yields, particularly in Burgundy and Bordeaux, might traditionally drive secondary market prices higher due to scarcity. However, current economic conditions may temper this effect, making selectivity even more crucial for investors.

Investors are advised to focus on high-performing brands and undervalued vintages, as well as to keep a close eye on broader economic trends, which could provide a boost to this alternative investment sector as 2024 draws to a close.

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