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Fine wine investors have little left to offer this year, after prices for fine wines and vintage Champagne fell sharply as demand from Chinese buyers dried up.
The price of Burgundy has fallen by 14.4 percent this year through the end of November vintage Liv-ex's Burgundy 150 exchange index. Vintage Champagne shares fell 9.8 percent, while Bordeaux's general index lost 11.3 percent.
The Falls marks the second consecutive difficult year for the fine wine market, which has been Hit in 2023 Because of rising interest rates – which make non-yielding assets such as wine less attractive to investors – and dwindling demand from Asia, traditionally a major buyer of French red wine.
“It's been very difficult,” said Gregory Swartberg, CEO of London-based wine investment firm Cru Wine. “November (2024) was one of the worst months of the year. “We're not out of the woods yet.”
The overall Liv-ex Fine Wine 100 Index is down 9.2 per cent this year to the end of November, while global stocks are up 20 per cent over the same period.
The losses stand in stark contrast to the market's boom during the coronavirus pandemic. Although restaurants were closed during the lockdowns, retail investors, with deep savings and time on their hands, piled in.
Unusual weather patterns Linked to climate change – warm weather at the start of the growing season, followed by severe frosts that kill the buds – has also limited the supply of new wine.
Such were the gains that even vintage Champagne and Burgundy prices made at times Returns exceeded high stock market returns And technology stocks.
However, some in the industry believe prices rose too high, too quickly, causing the market to decline.
“This bear market was a long-awaited correction after an unprecedented bull market during the pandemic,” said Callum Woodcock, CEO of wine investing platform WineFi.
The market has also been hit hard by falling demand from Chinese buyers, who have snapped up high-end burgundy cars in recent years but are now reining in consumption as the local economy falters.
Investors who have bought alternative assets such as wine in recent years as a way to diversify their portfolios have become more risk averse due to the uncertain economic outlook, said Tom Gearing, chief executive of investment firm Cult Wines and a former UK finalist. Copy of trainee.
Among the big-name wines that have suffered this year is Château Lafite Rothschild's Carruades de Lafite, whose 2021 vintage is down 29 percent this year to £1,640 for a case of 12, according to Liv-ex. In 2012 their prices fell by 42 per cent to £1,740.
Among Burgundy, the 2020 Bonnes Mares Grand Cru from Domaine Georges Roumier fell 44 per cent to £11,529 a case. Champagne house Louis Roeder's 2015 vintage is down nearly 17 percent.
There may be worse to come. Some industry insiders point to selling by Asian collectors, which they say is further depressing prices in the region. Many European producers fear that US President-elect Donald Trump will impose trade tariffs, just as he did on some European wine imports during his first term in office.
In addition, the so-called winemaking industry in Bordeaux Firstly The campaign—an annual spring festival where new wines are evaluated by critics and can be purchased before being bottled—proved largely unsuccessful. This is because buyers often find that instead of purchasing what is actually considered future wine, they can simply buy mature wine that has already been bottled on the secondary market at a lower price.
Producers in the region now face the challenge of how to price next year's production Firstly The campaign, which will include the 2024 vintage model. After an unwelcome combination of mildew, heavy rain and cold temperatures, this is “a very bad situation across the board,” according to Tom Burchfield, head of market intelligence at LiveX.
“There's a slight mood of uncertainty about what the right course of action would be,” said Michael Saunders, chief executive of Coterie Holdings, which owns wine merchant Lay & Wheeler and wine warehouse Coterie Vaults, who was recently in Bordeaux to meet with producers and traders.
Despite the gloomy mood across much of the industry, some investors are using this year's price decline as an opportunity to buy high-quality wines at lower prices.
Cru Wine's Swartberg said he has been buying, and advising his clients to buy, Krug 1996 and Dom Pérignon 1996, which he described as “exceptional wines” from Champagne that he believes will do well due to short supply.
Among Bordeaux, he bought 2000, 2005 and 2009 vintages such as Château Angelus and Château Cheval Blanc, and also acquired more Burgundian wines from Domaine Romanée Conti, Rousseau and Dujac.
“More and more people are starting to make the most of the current market conditions,” he said. “Two years ago it was unheard of to buy this wine at these prices.”
