The fine wine market showed further signs of a recovery in prices during December, according to data released by The Wine Investment Fund (TWIF).
The main indices rose by 1.3 per cent (Liv-ex 100) and 1.2 per cent (Liv-ex Investables).
Underlying conditions strengthened again, with solid demand for fine wine and some falling away of supply. The bid offer ratio on the Liv-ex exchange rose to a six-month high. Furthermore, since the end of the year prices have continued to climb with Liv-ex’s daily Index up 1.6 per cent year to date.
The first growths all saw a similar performance. There was an interesting difference between the lesser vintages, in which Lafite was the strongest, and the top vintages in which that position was taken by Mouton. The lesser vintages outperformed in December. Pétrus continued to shine, and Cheval Blanc to lag.
2012 saw the main index fall by nine per cent, the first time since records began that there have been two consecutive years of falling prices. The market was also not helped by a dismal en primeur season, which led to some disillusionment with Bordeaux, and, although there was continued demand from China, this was cancelled out by a faltering Japanese economy which weakened demand from this important fine wine consuming market.
The Wine Investment Fund’s (TWIF) central prediction for 2013 is for the main index to rise by 14 per cent. Statistics released by the Bordeaux promotion body (the Counseil Interprofessional du Vin de Bordeaux or CIVB) confirmed rapidly rising sales to Asia – particularly Hong Kong and China – but also increases to North America.
Much attention in the market focussed on the powerful American wine critic Robert Parker’s sale of a substantial stake in his magazine/website to Singaporean investors. TWIF considers this is unlikely to have an impact on the market in the shorter term, but may bring forward the time when the views of other writers have a more significant influence on wine prices.
TWIF outperformed its benchmark for seven of the 12 months of 2012. TWIF’s performance was also slightly ahead of the index for the year as a whole (-8.7 per cent compared to -8.9 per cent) even though the index makes no allowance for the costs of trading and storing wine.