The Liv-ex Fine Wine 100 Index, a key benchmark in the global fine wine market, has recorded its fifth consecutive monthly decline, falling by 1.0% in August 2024. This follows a similar dip of 1.1% in July, reflecting ongoing challenges in the high-end wine market.
Year-to-date, the index has fallen by 5.4%, although it remains 9.1% higher over a five-year period, indicating longer-term growth despite recent volatility. The Liv-ex 100 tracks price movements of the most sought-after wines from top regions such as France, Italy, the USA, Australia, and Spain, offering insight into broader market trends.
Broader Market Trends: Mixed Performance Across Sub-indices
The Liv-ex Fine Wine 1000, a broader index that tracks 1,000 wines from across the world, saw a marginal decline of 0.1% in August, closing at 384.9. Among its sub-indices, several regions experienced positive movement, including the Rest of the World 60, which rose by 0.8%, and the Rhône 100, Burgundy 150, and Champagne 50 indices, which also recorded gains. In contrast, Bordeaux wines faced the sharpest declines, with the Bordeaux 500 falling by 1.0% and the Bordeaux Legends 40 dropping by 0.5%. This downward trend highlights the struggles of the Bordeaux market, particularly as prices of some Bordeaux wines, especially from the 2019 vintage, approach their original release prices.
Investables Index and Bordeaux Struggles
The Liv-ex Fine Wine Investables Index, which tracks the price movement of investment-grade wines, experienced the steepest decline among all indices, falling by 1.8% in August. Over a five-year horizon, prices for these wines are now flat, signaling a stagnant market for wines traditionally considered strong investments. Bordeaux wines, a major component of this index, have been particularly hard-hit. The Bordeaux 500 and Liv-ex Fine Wine 50 indices are close to or below their 2021 lows, reflecting waning confidence in this historic region.
The Bordeaux market has faced challenges as many wines from the 2019 vintage are now priced near their ex-London or ex-negociant release prices, creating a reluctance among merchants to sell below these levels. With demand softening and prices falling, Bordeaux may continue to face headwinds in the coming months.
Activity Increases Despite Falling Prices
Despite declining prices, trading activity on Liv-ex has been robust. August saw a 3.1% increase in traded value and an 11.1% rise in traded volume. This suggests that while prices are under pressure, market participants are increasingly active, possibly seeking to capitalize on short-term buying opportunities or price corrections.
The Rest of the World 60 sub-index was the best-performing index in August, rising by 0.8%. Of its 60 component wines, 29 saw price increases, 10 remained flat, and 21 experienced declines. Dominus 2014 topped the list of best performers with an impressive price rise of 22.4%. Vega Sicilia’s Unico also performed strongly, with five of its vintages recording gains, most notably the 2010 vintage, which rose by 13.1% in August and is now up 29.4% year-to-date.
Liv-ex Fine Wine 100 and 1000: Key Indicators for the Fine Wine Market
The Liv-ex Fine Wine 100 Index is widely regarded as the leading benchmark for fine wine prices globally. The index tracks 100 of the most sought-after wines from prominent wine-producing regions like France, Italy, the USA, Australia, and Spain. As an industry-standard indicator, it provides insights into price movements and market sentiment within the high-end wine industry. Notably, the index has been tracked for over 20 years and is a trusted measure of fine wine market performance, often quoted on Bloomberg and Reuters.
The broader Liv-ex Fine Wine 1000 Index offers an even wider measure of market activity, tracking 1,000 wines from around the world. It comprises seven sub-indices, each representing key regions: Bordeaux, Burgundy, Champagne, Rhône, Italy, and the Rest of the World. These indices provide a comprehensive view of the fine wine market’s global diversity and help to monitor trends in both well-established and emerging wine markets.
Outlook: Resilience Amid Market Volatility
The fine wine market’s current downturn is reflective of wider economic uncertainties and shifting market dynamics, particularly in Bordeaux. However, the resilience shown by other regions, including the strong performance of wines from Spain, Italy, and the USA, indicates that there are still opportunities for growth in the global fine wine market. As trading volumes remain high, and specific wines, such as Vega Sicilia’s Unico and Dominus 2014, continue to outperform, the fine wine sector is likely to attract attention from investors seeking alternative assets.
In the coming months, the fine wine market will be closely watched, particularly as it navigates the impact of economic shifts and regional disparities. Whether Bordeaux can recover from its current slump or if other regions will continue to rise remains to be seen. For now, the Liv-ex Fine Wine 100 and 1000 indices remain essential tools for tracking these changes and understanding the complexities of the fine wine market.
Source: Liv-ex