Wine Prices Down 2.8% Through November
Is the Slump Ending Next Year?... "Chinese Interest Confirmed"
The premium 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 shifting their preference to 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 fallen."
Recently, premium wine prices have returned to levels seen at the end of 2020, with nearly all gains made during the COVID-19 pandemic having disappeared. Premium wine prices reached an all-time high at the end of 2022, driven by buyers with time, spending power, and access to low-interest loans.
This year, as U.S. tech stocks and gold surged, investors exited alternative asset classes such as wine.
In addition, President Trump imposed a 15% tariff on imports from the European Union, dealing a significant blow to the wine industry. According to Liv-ex, the amount spent by U.S. buyers on premium wines fell by about 44% this year.
Bordeaux's "en primeur" (pre-bottling futures) events have recently struggled. These events are considered a key indicator of overall demand, but in recent years, producers have set new wine prices too high, resulting in excess inventory and falling prices in the secondary market, which has dampened demand. The Financial Times (FT) reports that next year's event will be a critical turning point for a recovery in market sentiment.
Meanwhile, the FT noted that there are also signs the long-term slump in the wine market may be ending, as prices rose slightly over the three months from September to November.
Merchants 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 taking advantage of (undervalued) premium wine prices," adding, "I think this is thanks to the rebound in the Hong Kong stock market. It seems that disposable incomes among those in finance and law have increased somewhat." He also noted a rise in demand for top-tier Burgundy and vintage Champagne, saying, "Over the past few years, people have emptied out their cellars significantly."
Lee Krimble, Managing Director of Vinum Wines Group, said, "In recent meetings with Chinese clients, I was very impressed by the high level of interest in Burgundy," adding, "The wine market in Shanghai is changing rapidly and maturing."
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