May was a quiet month in terms of price movements for fine wine although volumes remained reasonable.
The Liv-ex 100 index fell by 0.3 per cent and the Liv-ex Investables was exactly flat at 0.0 per cent, according to The Wine Investment Fund (TWIF).
The flat market came despite a three per cent strengthening in the Chinese renminbi against sterling, which should have boosted prices. This was, however, counterbalanced by a slight weakening of the Japanese yen.
The 2012 en primeur season concluded with little change from the earlier pattern of generally disappointing sales due to the high release prices demanded by the chateaux. This has been a factor in the weaker indices during the en primeur campaign in April and May, but, as TWIF predicted, the effect has been considerably less than was the case last year. It appears that merchants this year anticipated the lower levels of en primeur business compared to previous years and focussed on other wines. The quicker-than-usual campaign has also helped by diverting attention for a shorter period than usual.
One Hong Kong auction showed surprisingly high prices across a range of wines. The prices were as much as double the UK market price, with Pichon Lalande faring noticeably well. Outside Hong Kong results were broadly in line with expectations.
Economic news around the world was mixed. The key factors of the economy of Japan saw a surge, with growth rising to 3.5 per cent annualised, benefiting from the effects of the expansionist policy over the last six months. The large potential market of India slowed slightly, but still grew at 4.8 per cent annualised. With France returning to recession, several other countries recorded negative growth, and even Germany only managed minimal positive figures. The rest of the Eurozone remained sluggish.
Continuing this year’s trend, Mouton Rothschild was the strongest of the first growths, with price increases of around 1.5 per cent on average across vintages. Margaux also rose slightly. Lafite was broadly flat, while Haut Brion and Latour falling by approximately one per cent. On the right bank of the Garonne Cheval Blanc also continued its strong start to 2013. Pétrus rose in value in post-1999 vintages but fell for more mature years.
The younger/older distinction was broadly reflected across most châteaux, although stronger vintages also outperformed lesser ones.
The Financial Conduct Authority’s (FCA) new rules ban the promotion of unregulated collective investment schemes (UCIS) and other similar products to retail investors in the UK.
Andrew della Casa, founding director, The Wine Investment Fund (a UCIS), says: “TWIF has for the last ten years since inception marketed itself responsibly to appropriate investors, always in compliance with the rules.
“We believe the new rules strike the right balance and go some way in helping to protect the majority of UK retail investors from inappropriate promotions, while allowing the investment industry to market more unusual or complex investment propositions to those experienced investors for whom these investments may be suitable and attractive options. So it’s business as usual for us at TWIF – whilst we also have The Wine Enterprise Investment Scheme Limited, with all its fiscal benefits and which is specifically excluded from and lies outside the scope of the new rules.”