Fine wine, if even the drop in indices in 2023 is a positive sign

After years of continuous and in some ways, tumultuous growth, the fine wines market - an investment niche that, despite its recent successes, remains, financially, little more than a complementary asset to slightly diversify the portfolio with respect to pillars such as art or real estate - in 2023 is showing the first and continuous signs of difficulty, as we have told in our usual analyzes of the Liv-Ex indices, a reference for monitoring the performance of this particular market. But, in a world of wine where, after all, “everything is always going well”, there is also the natural inclination of enthusiasts and operators to always look at the proverbial “glass half full”, such as Oeno Group, a leading company in the fine wines investment sector, to read this decline as a positive.
“The Liv-ex indices, which track the secondary market price trend of the world’s finest wines, show declines in the fine wine market in the last year”. However, the Liv-ex Fine Wine 1000 itself demonstrates that in the last five years, all of the regional sub-indices that comprise it (Bordeaux, California, Port, Burgundy, Champagne, Rhône, Italy, and the Rest of the World) have been largely positive, with an average growth of 29.5%, driven by the podium of Champagne (+71.7%), Burgundy (+67.6%), and Italy (+43%), explains a note.
“According to the Liv-ex, the international fine wine market has seen its values decrease over the last year, with peaks of -15%, as in the case of the Rhône” explains Michael Doerr, founder and CEO of the Oeno Group. He adds: “Investments in fine wines, on the other hand, should not be considered in such a short time frame as 365 days, but rather in the medium to long term. If they are currently bearish, it is a sign that the market is healthy because no economy is always bullish; otherwise, it would be a bubble about to burst. Indeed, this decline can be viewed as an advantageous investment time”. According to Oeno Group, the international economic situation is currently determined by various destabilising factors, such as the war in Ukraine, high inflation, and the Silicon Valley banking crisis, which have caused many markets to deflect in values, including some valuations on fine wines. Italy is one of the producing countries that has best preserved its value during this disastrous year. The values of the Italian sub-index Liv-ex Fine Wine 1000, which tracks the performance of the ten most iconic local labels, including five Super Tuscans, have fallen by 3.4% since January, but have risen by 0.3% in the last 365 days, reaching 16.3% in the last two years and even reaching 43% in the last five years.
“Over the last fifteen years, Italy has grown significantly in the global market for fine wines”, says Gabriele Gorelli, Master of Wine and Oeno Group Brand Ambassador for Italy. “The performance of its wines has been exceptional, driven not only by Tuscany, but also by a growing appreciation for Piedmont thanks to Barolo, Veneto, and the emerging territories, the so-called rising stars, such as Etna and Campania. It is precisely these, less known abroad as the homeland of fine wines, that will be able to give our extraordinary fine wines new international perspectives, and in which we as Oeno Group are investing”.