Liv-ex: third quarter 2021 brings fine wine market back to all-time highs

The stock market did not do well in September, with the S&P 500 index down by 4.8%, its worst performance since March 2020, when the pandemic was just beginning. This was due to a weak bond market, which pushed up interest rates, fuelled by inflationary fears due to the many problems in the supply chains of essential goods, both food and non-food, as well as concern over the Chinese property market, with the giant Evergrande still on the verge of bankruptcy. This is certainly not an exciting scenario for investments, yet the fine wine market has remained solid, so much so that at the end of September the Liv-ex 100 and Liv-ex 1000, the two indices that best describe the trend in the prices of fine wines traded on the secondary market, had largely put behind them the difficulties of the first half of 2020, when the Covid-19 caused the economy to collapse, approaching record levels.
September 2021 thus marks the closing of a circle: the record, the Liv-ex 100 (which groups the 100 most traded labels of the moment, including Barolo 2014 Bartolo Mascarello, Barolo Villero 2013 Brovia, Sperss 2013 Gaja, Barolo Riserva Monfortino 2010 Giacomo Conterno, Masseto 2014 and 2015, Ornellaia 2013 and 2015, Sassicaia 2014, 2015 and 2016, Solaia 2015 and Tignanello 2015 and 2016), had in fact reached 364.69 points in June 2011, before plummeting under the blows of the end of China’s bullish momentum, rebounding - more than a decade later - to 364.44 points, up +3.8% on the previous quarter. By contrast, the Liv-ex 1000, the largest index bringing together all sub-indices, rose for the eighth consecutive month, closing at 395.36 points.
Between the second and third quarters of 2021, the share of Bordeaux wines fell (to 42.1%), while the share of Burgundy wines grew (21.2%), so much so that the number of Burgundy labels traded on the market is already higher than the total for 2020. The second best-performing territory between July and September (a month traditionally marked by the releases of Bordeaux’s La Place, with wines now coming from all corners of the world, ed.) was Champagne, despite a declining market share at 7.7%, slightly more than Tuscany, at 7.6%, also down on the previous quarter.
Among the sub-indices, the Fine Wine 50 did very well, tracking the progress of Premiers Crus (Lafite Rothschild, Mouton-Rothschild, Haut-Brion, Margaux and Latour), up +4% on the previous quarter and +11.6% since the start of the year, with Lafite's 2018 being the most traded label - in value terms - in 2021. The Liv-ex 100, on the other hand, is doing even better: +5% on the previous quarter, +14.2% since the start of the year and +17.4% over the last 12 months, a trend that relies on the strength of labels from Italy, Burgundy and Champagne. The Liv-ex 1000, the index that tracks the fine wines market more broadly, from Bordeaux to Australia, as mentioned, reached an all-time high, following growth of +4% on a quarterly basis, +10.9% since the start of the year and +12.4% on an annual basis.
The best performing sub-index, as mentioned, was Champagne 100, which grew by 6% between July and September, as did Burgundy 150, then Rest of the World 60 (+4%), Bordeaux 500 (+3%), Italy 100 (+2%), Bordeaux Legends 50 (+2%) and Rhone 100 (+2%). All in all, the third quarter of 2021 for the fine wine market confirmed the sector's good momentum, especially thanks to the surge in September, followed by a subdued August and a July in which the en primeur campaign in Bordeaux never really took off. The solidity of the blue chips was confirmed, with Château Lafite Rothschild, Petrus, Château Mouton-Rothschild, Château Haut-Brion and Domaine de la Romanée-Conti topping the list of the most traded labels in terms of value during the period, while Château Lafite Rothschild again led by volume, followed by Château Pontet-Canet, Tenuta San Guido’s Sassicaia, Bollinger’s La Grande Année and Domaine de la Janasse’s Châteneuf-du-Pape.