After three years of declines, the wine market finally has something to cheer about as prices rose in the first half of 2015 — albeit at a modest pace.
Despite the economic headwinds in Europe and Asia, the benchmark Liv-Ex Fine Wine 50 Index has risen 0.8% since the start of the year, after dropping 40% from its mid-2011 peak.
The wine market has been roiled over the past seven years, first by the 2008 financial crisis and then by a recent sell-off driven in part by China's crackdown on lavish gift-giving. High prices for the critically-acclaimed 2009 and 2010 Bordeaux vintages also discouraged some buyers, while lesser vintages since 2011 have proved hard to sell, adding to stocks in the market.
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“The fine wine market is by no means back to anything that can be considered normal and the continued pressure on emerging markets is a concern to us,” London-based fund Wine Asset Managers LLP wrote in its latest investor letter. “But we have at least effectively experienced the downturn already as a result of the anti-graft measures in China, and our market is enjoying some relative calm.”
The Liv-ex 50 Index comprises 10 recent physically available vintages from each of Bordeaux's left-bank first-growth estates. It includes Chateau Lafite Rothschild, Chateau Latour, Chateau Margaux and Chateau Haut Brion from the original 1855 classification and Chateau Mouton Rothschild, added in 1973.
A review last month by critic Robert Parker of Bordeaux's 2005 vintage led to some of WAM's holdings being assigned higher scores, including Haut Brion, Chateau La Mission Haut Brion, Chateau Cheval Blanc and Chateau Pavie, it said, noting the review was a “net positive for us.”