Allegrini 2024

Liv-ex 100, in July the first drop (-0.3%) since June 2020: tensions are high

Inflation, energy costs, and the International situation make even fine wines pay the fear of a tightened economy. Italians are holding their own
Fine wines trend

Global economy is expected to experience a very hot autumn, as inflation shows no signs of slowing down, while the costs of raw materials and energy is rising and the International situation — from Ukraine to Taiwan - is becoming more and more tense and dramatic. Even wine will necessarily have to take all of this into account, because the declining purchasing power of the middle class will inevitably affect daily consumption.
The first signs of drawbacks come from the fine wine world, and the Liv-ex 100 (https://www.liv-ex.com/), the index that tracks the price trend of the 100 fine wines on the market. The index also includes Barolo 2016 Bartolo Mascarello, Barolo Monvigliero 2016 Comm. G.B. Burlotto, Barbaresco 2018 Gaja, Barolo Monfortino Riserva 2014 and 2013 Giacomo Conterno, Masseto 2016 and 2017, Ornellaia 2018, Brunello di Montalcino Poggio di Sotto 2016, Sassicaia 2016, 2017 and 2018, Solaia 2018, Soldera Case Basse 100% Sangiovese and Tignanello 2016 and 2018, which in July lost 0.3%. It should not be considered a collapse, but a negative sign , which had not been registered since June 2020, when the world was struggling to surface from the first lockdown.
Since the beginning of the year, however, Liv-ex 100 has grown 4.8%,
confirming the historic counter cycle trend of fine wines that instead in August will find it more difficult to reverse the trend. The positive figure, remaining in the July performance of Liv-ex 100, comes from two Italian wines - Barolo Monvigliero 2016 Comm. G. B. Burlotto and Barbaresco 2018 by Gaja, whose prices have increased, respectively, + 8% and +6.8%. The Liv-ex Fine Wine 50, which instead traces the movements of the last ten vintages on the market of the five Premier Crus of Bordeaux (Château Haut-Brion. Château Lafite-Rothschild, Château Latour, Château Mouton Rothschild and Château Margaux), closed with a negative sign, -0.7%.
Broadening the analysis to include the Liv-ex 1000, the index that groups the seven regional Liv-ex indices (Bordeaux 500, Bordeaux Legends 40, Burgundy 150, Champagne 50, Rhone 100, Italy 100 and Rest of the World 60), and analyzes the trading activity of 600 wine merchants, the result for the month of July is still positive, registering a growth of 0.4%, despite the decline of three of its sub-indices. This is the second consecutive month that Liv-ex 1000 has grown less than 1% compared to the previous month. It signals an evident slowdown because of the price of inflation and the recession now upon us, as well as advising caution to fine wine investors. Champagne 50 registered the largest growth (+ 3.1%), followed by Burgundy 150 (+ 1.2%), while Italy 100 (+ 0.3%) and Bordeaux 500 (+ 0.1%) are essentially stable. Negative signs, instead, for Bordeaux Legends 40 (-0.4%), Rhone 100 (-1.1%) and the Rest of the World 60 (-0.8%). From the beginning of the year, though, the best performance has been Burgundy 150, which grew + 25.4%, while Italy 100 registered + 5.5%.

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