Wine Prices Down 2.8% Through November
Is the Slump Ending Next Year?... "Chinese Interest Confirmed"
The high-end wine market, including Burgundy and Bordeaux, is expected to record a decline this year. This is due to U.S. buyers turning away following tariffs imposed by the Donald Trump administration, as well as investors preferring other assets such as stocks and gold.
According to the Liv-ex Fine Wine 100 Index, wine prices fell by 2.8% through the end of November this year. Bordeaux wine prices dropped by 6.6%, Burgundy by 4.4%, and vintage Champagne by 4.3%.
Justin Gibbs, Deputy Chairman of Liv-ex, said, "It has been a really tough year," adding, "In previous downturns, there were at least some positive aspects, but in this bear market, everything has declined."
Recently, high-end wine prices have returned to levels seen at the end of 2020, with almost all of the gains made during the COVID-19 pandemic now erased. In late 2022, high-end wine prices reached record highs as buyers with time, spending power, and access to low-interest loans flocked to the market.
This year, as U.S. tech stocks and gold soared, investors exited from alternative asset classes such as wine.
Additionally, the wine industry was hit hard when President Trump imposed a 15% tariff on imports from the European Union. According to Liv-ex, the amount spent by U.S. buyers on high-end wines fell by about 44% this year.
Bordeaux's 'en primeur' (pre-bottling futures) event has recently struggled. This event is a barometer of overall demand, but in recent years, producers have set prices for new wines too high, leading to excess inventory and falling prices on the secondary market, which has dampened demand. The Financial Times (FT) noted that next year's event will be a key turning point for a recovery in market sentiment.
Meanwhile, the FT also pointed out signs that the long-term slump in the wine market may be coming to an end, as prices rose slightly over the three months from September to November.
Traders in Hong Kong and Singapore reported that Asian demand, which had been hit by China's economic slowdown, is showing signs of recovery.
Paulo Pong, founder of Altaya Wines in Hong Kong, said, "We are seeing more customers take advantage of (undervalued) high-end wine prices," adding, "I think this is thanks to the rebound in the Hong Kong stock market. It seems that disposable incomes among professionals in finance and law have increased somewhat." He also noted that demand for top-tier Burgundy and vintage Champagne has risen, saying, "Over the past few years, people have emptied their cellars quite a bit."
Lee Krimble, Managing Director of Vinum Wines Group, said, "In recent meetings with Chinese clients, I was very impressed to see the high level of interest in Burgundy," adding, "The wine market in Shanghai is changing and maturing rapidly."
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