Fine wines, 2023 a black year. Italy is doing fairly well, still in the negative. 2024 will be worse

2023 a black year for fine wines. And, 2024 will be worse The Liv-ex 100 index has been down -13.2% since the beginning of this year, 2023, and it was down -13.4% between November 2022 and November 2023. Liv-Ex 1000 is following the exact same trend, while the Italy 100 index has been the “best” ever this year, cutting its losses at -6.4% in 2023, and -6.9% over the last 12 months. It has been doing a bit better than Bordeaux 500 (-10.3%), Bordeaux Legends 40 (-11.1%), Burgundy 140 (-16.2% in 12 months), and Champagne 50 (-19.1% ). This is summarized data of the leading platform for the secondary market of important investment wines, which reveal a sudden stop, after years of growth, when some wines have been, perhaps, more the subject of financial speculation than of a real and passionate investment. In any case, in this substantially negative panorama, a patriotic spirit is somewhat consoling since the index that has resisted the best is the one dedicated to Italy. The Italian index is comprised of Barolo Mascarello’s Barolo (vintages from 2009 to 2018), Barolo Falletto Le Rocche Riserva by Bruno Giacosa (vintages 2000, 2001, 2004, 2007, 2008, 2011, 2021, 2014, 2016 and 2017), Flaccianello of Pieve di Fontodi (vintages from 2010 to 2019), Barbaresco by Gaja (vintages from 2010 to 2019), Barolo Monfortino Riserva by Giacomo Conterno (2001, 2002, 2004, 2005, 2006, 2008, 2010, 2013, 2014 and 2015), and also the vintages from 2010 to 2019 of Masseto, Ornellaia, Sassicaia, Solaia and Tignanello.
Italy has gained positions and numbers of wines on the Liv-Ex Power 100, as we had informed you before, and some of the best performing wines are also Italian, according to the Liv-Ex report. One of the highest value wines traded, as a matter of fact, among the fine French wines such as Chateau Lafite Rothschild, Petrus, Dom Perignon, Cristal by Louis Roederer and Comtes de Champagne by Taittinger, and the Americans Screaming Eagle and Opus One, was Tenuta San Guido’s Sassicaia 2019. One of the most traded wines in volume that stands out, instead, is an excellent classic such as Antinori's Tignanello, 2019 vintage. Plus, the new entry, Argiano's Brunello di Montalcino 2018, which is the direct effect of the award the US magazine "Wine Spectator” gave it, placing it at number 1 overall, on its “ Top 100 Wines of 2023”. Observing individual Italian wines, according to WineNews' in-depth analysis, the wines that grew the most in terms of increase in value on the Italy 100, in 2023, were Giacomo Conterno's Barolo Monfortino Riserva 2021 (+42 .1%), Flaccianello della Pieve 2011 from Fontodi (28.4%) and Barbaresco 2010 from Gaja (+19.9%). Looking instead at the wines on Liv-Ex 100, the best is Poggio di Sotto’s Brunello di Montalcino 2017 of the ColleMassari Group, at +1.3%.
Up until a few months ago, betting on fine wines was considered a “safe investment” by many (but those who invest professionally know that 100% safe investments do not exist). The actual scenario, though, after such a euphoric period, seems totally changed, as the Liv-Ex indices are all positive, only if we look at the 5-year horizon (Italia 100, in this case, at +33.7%, second, in terms of growth, only to Champagne 50, which registered +53%). In the past, headlines that announced “wine is better than gold and the stock market” are like a distant memory, because the comparison of the Liv-Ex 100 performance to gold prices and the main stock market indices, in 2023, is brutal. As we mentioned, the Liv-Ex 100 has registered -13.2% decline since the beginning of 2023, while, for instance, gold is at +8.9%, Nasdaq at +38.9%, and S&P 500 at +21%. Philippe Tapie, president of the “Grands Crus” Commission of Bordeaux Négoce (an organization that brings together hundreds of “negociants” that sell 2/3 of the Bordeaux wine production, and in 2022 they traded 354 million bottles for a turnover of 2.9 billion euros), looking at the future of the “Place de Bordeaux” system that is currently going through an uninspiring period, stated, “fine wines are not just speculative and financial products. These wines need to be drunk and shared by our end consumers”.
Moreover, according to Liv-Ex forecasts, 2024 looks even blacker than 2023. “Purse strings are much tighter than in 2022, and sellers find they are short of liquidity but instead find that they have a lot of inventory, purchased at high prices that buyers are no longer willing to pay upfront. Many collectors have become net sellers as a result of rising holding costs and wine conservation, and the feeling is that producers are asking too much for their new releases. The prospect of receiving high-yielding (and high-quality) vintages from Burgundy, Tuscany, California, Bordeaux and Champagne is low. Is there room for large volumes of expensive wines on the current market? In 2024, the role of harvests such as Burgundy and Bordeaux En Primeur will be more crucial than ever, as will the price of the wines released. We have reached the classic impasse typical of bear markets; that is, buyers will not purchase wines at their current market price, and sellers are reluctant to lower prices and take losses. Meanwhile, supplies are piling up in warehouses and wineries, and there is more to come. A compromise must be reached between the two sides of the market while waiting until the macroeconomic environment improves and interest rates fall. The ongoing price correction has so far not been enough to convince buyers to return in large numbers. And, prices seem destined to remain under pressure in the short term”, Liv-Ex explained.