Fine wine bounces back in 2016

Having recorded a full year of monthly gains in November, the Fine Wine 100 – the industry benchmark – has also outperformed other global indices over the course of 2016 Liv-ex has reported.

The Fine Wine 100 is back at its highest level for five years, the Fine Wine 1000 has hit multiple new highs over the course of the year and the first growth tracker, the Fine Wine 50, is actually the best-performing index of the year to date, though it is still 25.3% below its absolute peak reached during the China-led bull market of 2011.

After four years of decline, Bordeaux has bounced back in 2016 and the category (and indeed the market generally) benefitted hugely from sterling’s weakness post-Brexit.

Yet while Bordeaux’s indices have surged on the Fine Wine 1000 and the wines have taken a substantial share of rade by value on the Liv-ex exchange, its volume share hasn’t changed much since last year, holding at 74.4% a month.

Read more: Fine wine trends 2016 – the merchants’ views

Burgundy and Champagne have also seen extremely positive gains this year and Burgundy has taken the second highest average monthly trade at 7.7%, reclaiming its place from Italy which saw its monthly volume share fall to 6%.

Champagne’s average trade each month was also down to 5.3% but it remains well above the 2.8% it used to command every month as recently as 2014. The market share for the ‘Rest of the World’ wines was 4.7%.

More generally, the number of wines traded in the secondary market continued to grow. Over the past year more than 4,000 labels from 70 brands have traded – up from 3,000 labels across 265 brands the year before.

2016 also witnessed the inaugural trades on Liv-ex of wines from England – the Nyetimber Classic Cuvée 2010 in August – and China – the 2013 Ao Yun this September.

The year ahead

Looking ahead to the quickly approaching 2017, Liv-ex stated that despite the market looking “robust” for now, one should not assume that the gains will continue uninterrupted for another year.

Sterling for example has begun to firm up over the past two months – although not to the detriment of the market so far.

Having contributed to the free-fall of the market from 2011-2014, Bordeaux has been behind the recovery this year. Arguably en primeur has lost the impact on the course of the market it previously wielded. A limited campaign this year, marked once again by high prices, did not throw the market into decline as previous campaigns had been wont to do. Yet if the 2016 vintage is as good in quality as early reports suggest then, said Liv-ex, “en primeur will therefore be an important factor in determining the direction of the Bordeaux market in 2017.”

Away from Bordeaux however it is clear that the market has continued to broaden and will go on doing so in 2017.

For more on the fine wine market’s performance in 2016 see the December issue of the drinks business.