Fine Wine Market Participants Anticipate 8.7% Returns

Liv-ex, the fine wine exchange’s annual member survey reveals an overwhelmingly bullish view of the market amongst traders. Ninety percent of respondents predicted an increase in the Liv-ex 100 over the course of 2015, with an average expected rise of 8.7%. In January, The Wine Investment Fund (TWIF) forecast a 9% rise in the Li-ex 100 for 2015, recognising that the upcoming en- primeur season would generate some uncertainty in the direction of prices. Indications of a relatively early and quick en-primeur campaign might mean this uncertainty is resolved quickly. TWIF expect Q2 to generate positive returns before the quiet summer months of July and August and retain their 9% forecast for the year as a whole.

“Sentiment in the market has clearly become more positive”, commented Andrew della Casa, Founding Director, TWIF. “We saw solid proof of this in our EIS’s (enterprise investment scheme) successful funding round which closed at the end of March and bodes well for our next quarterly close in June”.

March followed the pattern of February with relatively quiet markets and a slight drift down in the main indices. The Liv-ex 100 returned -0.45% and the Liv-ex Investables -0.05%. TWIF’s performance in March was -0.25%, having anticipated subdued markets reflecting the timing of the Chinese New Year holiday in late February and the preparations for the 2014 Bordeaux en primeur releases. Indeed, when TWIF published their market forecast at the start of the year they suggested that these would be the two key influences affecting prices in Q1. TWIF’s central forecast for the Liv-ex 100 for Q1 as a whole was +1.1%, which is exactly where it stands.

Château Latour was in the spotlight in March. Having withdrawn from en primeur, the château’s policy is now to release back vintages when it believes they are ready to drink. Last month saw a release of the 2003 which was competitively priced and sold well – another sign of the strong latent demand for top Bordeaux. This did not help younger vintages of Latour already on the market: the 2005, 2009 and 2010 all fell. Notably, though, mature vintages attracted buyers: the 1990, 1995, 1996 and 2000 all showed gains. Elsewhere, Lafite, Mouton and Cheval Blanc were the strongest performers.

Global Auctions
Major wine auctions around the globe were more positive than in previous months with sales in London and Hong Kong achieving good sell through rates and a number of sale prices in excess of the wider market. Most notable was Christie’s in New York, where signs of a resurgence in North American demand were clear with many strong prices – for example, Lafite 2001 sold for £5,350 (market £4,700) and Lynch Bages 1996 for £1,400 (market £1,150).

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