Greater Noida (National Desk): The worldwide good wine market is in a difficult situation due to the significant decline in demand for Chinese buyers. The pricing of luxury wines such as Burgundies and vintage Champagnes has gone down consecutively for the last two years.
Liv-ex’s Burgundy 150 index shows that the price of Burgundy fell by 14.4% this year till November. The price of Vintage Champagne decreased by 9.8%, and at the same time, the price of Bordeaux went down by 11.3%. These numbers demonstrate a prolonged hard time for the fine wine market with the consequence of lower demand and higher interest rates.
“It’s been super tough,” said Gregory Swartberg, CEO of London-based wine investment company Cru Wine. “November was one of the worst months of the year. We’re not out of the woods yet.” Liv-ex’s overall Fine Wine 100 index fell 9.2% this year, contrasting sharply with a 20% rise in global stock markets.
For the luxury wine market, the pandemic appeared to be a paradise that allowed it to oversell the product, while the small-scale investors who were facing issues due to the lockdown were on the lookout for alternative investments. Nevertheless, this has not been smooth sailing for the sector; the shrinking Chinese market and weakening investor interest in the industry are the chief culprits to blame.
“The prices for wine were too high, too soon the pandemic was still on,” Callum Woodcock. WineFi CEO told us. “In fact, this bear market is only a delayed repositioning time after the immoderate run of a bull market full of thrillers.
”Chinese buyers, who have been one of the leading buyers of high-end French wines, have reduced their spending in the wine market. Industry observers underline the economic uncertainty and the altered consumption patterns in the country as the primary causes of this decreasing trend.
The downturn has also affected specific wines. Château Lafite Rothschild’s Carruades de Lafite 2021 vintage is down 29% this year, selling at £1,640 for a case of 12, according to Liv-ex. Its 2012 vintage has tumbled 42%, now priced at £1,740.
Burgundies have seen even steeper declines. Domaine Georges Roumier’s Bonnes Mares Grand Cru 2020 fell 44% to £11,529 a case. Champagne house Louis Roederer’s 2015 vintage has dropped nearly 17%.
Unusual weather patterns, including frosts and heavy rainfall, have compounded the industry’s challenges. This year’s Bordeaux en primeur campaign—a key event for new wine releases—was unsuccessful, with many buyers opting for mature wines available at lower prices.
“There’s a mood of uncertainty among producers,” said Michael Saunders, CEO of Coterie Holdings. “Producers are struggling to determine the best course of action.”
Despite the challenges, some investors see opportunities. Swartberg has been buying Krug 1996 and Dom Pérignon 1996 Champagnes, which he describes as “phenomenal vintages” with limited supply.
In Bordeaux, Swartberg acquired vintages from the 2000s, 2005, and 2009 of Château Angelus and Château Cheval Blanc. He has also invested in newer Burgundies from Domaine Romanée Conti and Rousseau.
“More people are starting to capitalize on current market conditions,” Swartberg said. “Buying wines at these prices was unheard of two years ago.”
While the fine wine market faces uncertainties, savvy investors are turning challenges into opportunities, banking on the enduring value of top-quality vintages.
