While prominent stock indices such as the Dow Jones and the S&P 500 recorded a positive performance in the second quarter of 2023, the Fine Wine index "Liv-ex Fine Wine 50" witnessed a significant decrease in its value, plunging by 5.5 %. These findings are highlighted in a report released by the English trading platform Liv-ex on July 4th. Additionally, the Liv-ex 100, consisting of the 100 most actively traded wines, declined by 6.1%, while the Liv-ex 1000 experienced a substantial downturn of 6.8%. Consequently, all Liv-ex indices experienced a considerable depreciation in value.
However, in the first quarter, the Fine Wine market managed to maintain stability, with the Liv-ex Fine Wine 50 experiencing only a marginal 0.7% decline. Taking a broader view of the 5-year trend, all three Liv-ex indices exhibited a positive growth trajectory, delivering substantial returns.
According to Liv-ex, several key factors contributed to these challenges, including the impact of inflation and the complexities of the prevailing economic landscape. In the United States, concerns regarding a potential recession and market speculation intensified volatility. Meanwhile, in Europe, inflationary pressures, coupled with rising ancillary and living costs, along with the looming possibility of a recession, led to cautious investment behavior.
During the En Primeur campaign in May, the Fine Wine market witnessed a mixed performance. The campaign was marked by noticeable price hikes
One of the leading performers, the 2010 Château Climens, showcases a remarkable price increase of 57%. Bordeaux, as a region, successfully retained its leading position, accounting for a significant share of 41.6% of the market volume. This represents a notable increase compared to the average market share of 35.1% in 2022, primarily driven by robust demand from both the US and European markets. Burgundy, on the other hand, managed to increase its market share from 23.5 to 23.8%.
In contrast, all other regions, including Champagne (11.7%), Rhône (2.5%), Piedmont (3.1%), and the United States (5.8%), experienced a decline in their respective market shares, highlighting the broader market challenges faced by the Fine Wine industry.
Additional casualties emerge
It is worth noting that Fine Wine is not the only sector witnessing a decline; other prominent indices such as crude oil and the Hang Seng stock index from Hong Kong have also experienced setbacks. Over the past twelve months, the Hang Seng index witnessed a substantial decline of 13%, while crude oil prices plummeted by 35.1%.