After three years of decline, the wine market finally has something to cheer about, as prices rose in the first half of 2015 – albeit at a modest pace.
Despite the economic headwinds in Europe and Asia, the benchmark Liv-Ex Fine Wine 50 Index has risen 0.8 per cent since the start of the year, after dropping 40 per cent from its mid-2011 peak.
The wine market has been roiled over the past seven years, first by the 2008 financial crisis and then by a recent sell-off, driven in part by China’s crackdown on lavish gift-giving. High prices for the critically acclaimed 2009 and 2010 Bordeaux vintages also discouraged some buyers, while lesser vintages since 2011 have proved hard to sell, adding to stocks in the market.
'The fine-wine market is by no means back to anything that can be considered normal, and the continued pressure on emerging markets is a concern to us,' London-based fund Wine Asset Managers (WAM) LLP wrote in its latest investor letter, 'but we have at least effectively experienced the downturn already, as a result of the anti-graft measures in China, and our market is enjoying some relative calm.'
The Liv-ex 50 Index comprises ten recent physically available vintages from each of Bordeaux’s left-bank first-growth estates. It includes Château Lafite Rothschild, Château Latour, Château Margaux and Château Haut-Brion, from the original 1855 classification, and Château Mouton Rothschild, added in 1973.
Last month, a review by critic Robert Parker of Bordeaux’s 2005 vintage led to some of WAM’s holdings being assigned higher scores, including Haut-Brion, Château La Mission Haut-Brion, Château Cheval Blanc and Château Pavie, the fund said, noting that the review was a “net positive for us”.
News by Bloomberg, edited by ESM