After soaring to all-time highs last year, outperforming global equities and gold, sales of wine from France’s Burgundy region have dropped in 2019, while wines from Italy, Champagne, and the Rhone regions gained momentum.
That’s according to an annual report on the state of the international fine wine market by the London International Vintners Exchange, known as Liv-ex.
The report found that this year’s top 10 best-performing wines largely excluded those from Burgundy, the area that produced the biggest price risers in 2018.
The regions that steadily gained the most momentum in 2019 were Italy, Champagne, and the Rhone. Among the 10 best performing wines, there was only one from Burgundy, though it came in last place for performance.This is a drastic shift from last year, when the Burgundy 150 hit an all-time high in December 2018, outperforming global equities and gold. This year, it’s been the worst-performing index, falling 7.3% and The Bordeaux 500 dipping by 2.5%.
In the past, analysts have seen a correlation between wine and gold—since both commodities have been considered safe from inflation. However, gold outperformed fine wine in 2019, rising 14.3%.
“The purpose of the report is to inform the wider world about the activity on the fine wine market that year—in keeping with our vision to make the wine market more transparent,” says Justin Gibbs, Liv-ex director and co-founder.
Experts believe the changing face of the fine wine market is a result of the impact of political and economic factors, including Brexit uncertainty, the introduction of U.S. tariffs on European wines, the U.S.-China trade war, as well as political and economic strife in Hong Kong.
The Champagne 50 and the Italy 100 were the only regional indices to make gains this year, rising by 2.2% and 4.6% respectively, in part from increased world attention as well as low entry price points into the market—and because both of these regions were excluded from the 25% U.S. import tariffs.
The top-performing wine of 2019 was Giacomo Conterno, Barolo Riserva Monfortino, a 2002 vintage that grew 75% in value over the past year. This was followed by a 2007 Chapoutier, Ermitage Pavillon from Rhone, and a 2004 Bollinger, Grande Annee from Champagne.
Looking ahead, the report found that Italy and Champagne are most likely to continue benefiting in 2020 both in terms of price performance and trade share growth, while Burgundy will remain vulnerable due to its relatively high prices.
The global marketplace for the wine trade, Liv-ex has over 470 members from startups to established merchants and helps provide these vendors with the tools they need to price, source, and sell wine more efficiently. Liv-ex publishes the actual prices at which wines are transacted and has a database of over 644 million current and historic price points.
Founded in 2000 by two stockbrokers, Liv-ex offers members the opportunity to buy and sell over 15,000 wines.
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December 11, 2019 at 02:43AM
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Burgundy Sales Drop in 2019 After Hitting All-Time High Last Year - Barron's
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