The London-based wine trading platform Liv-ex has noted significant trade declines across all wine indices in its current May report. The British company attributed the sharp decline to a combination of the Easter holidays, the trade being preoccupied with En Primeur tastings in Bordeaux, and the imposition of tariffs by the US government. As a result, total trade value fell by 30.2% compared to the previous month, and the number of bids dropped by 24.7%. The benchmark 'Liv-ex Fine Wine 100' index closed down 1.7%, marking its largest monthly decline since August 2023. Of all sub-indices, the 'Champagne 50' was most affected, with a decrease of 2.6%.
The cause is essentially the weakening US market. This market is currently struggling not only due to the imposition of punitive tariffs by Donald Trump but also because of the currently weak dollar exchange rate. Consequently, US purchases on the secondary fine wine market continued to decline last month, ending with a share of only 19.9% of the total purchase value. According to Liv-ex, this is the lowest level since January 2023.
In nominal terms, US purchases reportedly decreased by 34.8% compared to March and by 58.0% compared to February. Besides Champagne, Tuscany and particularly Piedmont also suffered from this, with Piedmont's US bid exposure in April falling furthest below its previous level. Indeed, according to the Liv-ex analysis, "US buyers didn’t wait until the announcement on April 2nd to drop the value of their bids. They started after the threat of 200% tariffs on March 13th, before pulling most of them completely immediately after April 2nd." Interestingly, the share of Bordeaux in the total value of US purchases rose to 43.3% in April during this period, a level not seen in a long time.
Liv-ex was able to report a glimmer of hope from Asia. Purchase declines were also reported from there; however, the Asian purchase value in April was 24.7% above the 2024 monthly average. Liv-ex Market Analyst Sophia Gilmour therefore spoke of "a return of Asian buyers, who are concentrating more on Burgundy than on Bordeaux." Consequently, in the last week of April, more buyers from Asia were reportedly represented on Liv-ex than from any other buying segment.
Overall, however, the short- to medium-term outlook was rather cautious. While the 90-day suspension of EU wine tariffs had brought temporary relief, the situation reportedly remains very uncertain. Given this situation, the Liv-ex conclusion states, "it is likely that US buyers will continue to sit tight until July 9th when a further decision can be expected." SP
