The international luxury wine market is undergoing a seismic shift in regional focus.
After years of dominating the global stage, Bordeaux’s market share has fallen in 2024, while Tuscany has emerged as an increasingly attractive alternative for investors and collectors. This transformation is driven by a complex interplay of economic, commercial, and supply factors, reshaping consumer preferences in key markets like the United States.
Bordeaux: A Decline Rooted in Pricing and Market Dynamics
Bordeaux’s waning dominance is part of a broader trend that has been consolidating over several years, despite a brief rebound in 2023. Data from Liv-ex, the leading exchange platform for high-end wines, reveals a significant decline in transaction volumes for Bordeaux wines throughout 2024. Historically perceived as a safe investment during uncertain times, Bordeaux is now facing challenges that undermine its hegemony.
Ineffective Pricing Strategies
One of the primary culprits behind Bordeaux’s decline is ineffective pricing at the time of wine release. Many châteaux have maintained high prices for new vintages, creating a supply-demand mismatch. The bid-to-offer ratio, a critical indicator measuring buying interest versus selling pressure, reached historically low levels in 2024. Distributors and traders have accumulated unsold stock, incurring substantial holding costs.
Struggles of Post-2015 Vintages
Recent vintages, particularly post-2015, are rapidly depreciating in value. A significant proportion of these wines are being traded below their original release prices, in stark contrast to pre-2009 vintages. Older vintages, benefiting from scarcity and stable pricing policies of the past, remain a favored choice among collectors, showcasing greater price stability.
Tuscany’s Resilience and Rise
While Bordeaux grapples with these setbacks, Tuscany has demonstrated remarkable resilience and growth. Although the Italy 100 index recorded a 6% drop in 2024, this performance is comparatively stronger than other Liv-ex 1000 sub-indexes. Trade volumes for Italian wines, particularly those from Tuscany, have seen significant increases.
The US Market’s Role
The United States has been a pivotal driver of Tuscany’s growth. In 2024, the total value of Italian wine purchases by US buyers surged by 69.3% compared to the previous year. Notably, Tuscany has surpassed Piedmont as the leading region in Italian wine sales. While Piedmont’s commercial value declined by 5.2%, Tuscany’s grew by 16.1%.
Super Tuscans and Beyond
Super Tuscans such as Ornellaia, Tignanello, and Sassicaia continue to dominate, but demand for Brunello di Montalcino and exclusive labels like Soldera Case Basse has also surged. Both Masseto and Soldera have witnessed considerable increases in transaction values, reflecting a growing interest in rare and high-quality offerings.
Sassicaia’s success deserves special mention. Its 2021 vintage, priced at £2,500 per 12-bottle case upon release, has been one of the most traded Italian wines by value this year. The market’s acceptance of this pricing underscores the wine’s stability and enduring appeal in a volatile market.
Adjusting to New Realities
The shift from Bordeaux to Tuscany reflects a market adapting to evolving economic conditions and consumer preferences. Tuscany’s competitive pricing, diverse offerings, and balance between quality and quantity have captivated international buyers. In contrast, Bordeaux must confront the challenges of revising its pricing strategies and regaining buyer confidence to halt its declining market share.
As the luxury wine market continues to evolve, the success of Tuscany serves as a testament to the importance of adaptability and responsiveness to market demands. Whether Bordeaux can reclaim its former glory remains to be seen, but the rise of Tuscany marks a new chapter in the history of fine wine.
Source: Vinetur