March saw declines across all major Liv-ex indices, marking continued volatility in the fine wine market.
The Liv-ex Fine Wine 100, the industry benchmark, fell by 0.8%, closing at 323.51. While still 2.2% above the 2018 peak, this level now serves as a critical support point. The broader Liv-ex Fine Wine 1000 index also recorded a 1.1% drop, closing at 358.8.
Bordeaux and Burgundy: Diverging Trends
The Bordeaux Legends 40 sub-index, tracking blue-chip back vintages, was the only segment to register growth, up 0.9%. This contrasts sharply with the Fine Wine 50 index, which tracks the 10 most recent vintages of First Growths, falling by 1.4%. In Bordeaux, trade volumes are rising, but the focus has shifted to lower-value wines. The 2021 vintage, initially mispriced, now accounts for the largest share of trade volume, with the most recent prices averaging just 3.8% above ex-château.
Burgundy continues to undergo structural shifts. The volume of Regional Burgundy traded has surged to 48.2% of total Burgundy transactions year-to-date, up from 39.4% in 2024 and only 29% in 2021. At the same time, average Grand Cru Burgundy prices have declined for six consecutive months, while Premier Cru prices remain 23.5% lower than in March 2020 and 44.7% below their peak.
Seller-Driven Market?
A notable trend in 2024 has been the increasing proportion of seller-triggered trades, starting earlier in the year and from a higher baseline than in 2023. This suggests mounting pressure on stockholders, potentially due to liquidity constraints. While trade volumes are rising, average trade values are falling, reflecting a shift towards lower-priced wines.
Champagne and Spain: Bright Spots in a Challenging Market
Champagne trade volumes have more than doubled compared to March 2024. High-volume trades of Perrier-Jouët Belle Époque 2015, Dom Pérignon, and Louis Roederer have driven this growth, with Dom Pérignon's trade volume up 158.8% and Roederer up 68.4%.
Spain's fine wine trade has seen a significant boost, primarily due to Vega-Sicilia. The winery’s increased trading activity has propelled Spain’s market share higher, demonstrating demand resilience amid broader market softness.
Outlook: Liquidity Pressures and Market Adjustments
As stockholders continue to offload lower-value wines, the market is undergoing a repricing phase. The preference for Regional Burgundy suggests that sellers are clearing inventory strategically before moving on to higher-end categories. With fine wine indices under pressure, the coming months will be crucial in determining whether buyers regain confidence or if sellers continue to dominate price action.
Source: Liv-ex