A major theme in 2020 was the impact of the 25% US tariffs on European goods, including wine under 14% abv, which came into effect on 18th October 2019, and the threat of additional 100% tariffs. These were linked to disputes over the WTO’s ruling on the Airbus/Boeing dispute. The tariffs notably influenced demand and the direction of fine wine prices.
Impact on US demand
The chart below shows how US purchasing of fine wine has changed since the beginning of 2019. Before the tariffs were introduced, Bordeaux accounted for 48% of the trade by value on average (Jan 2019 – Oct 2019). Since October last year, Bordeaux’s average share of US buying has fallen to 33%. Burgundy’s share has also declined – from 13% before the tariffs to 8%.
Conversely, demand for regions exempt from the tariffs, such as Champagne (from 10% to 14%), Italy (from 18% to 25%) and the Rest of the World (from 4% to 10%), has risen significantly.
USA regional buying habits as a % of total USA trade share
Impact on wine prices
Regions exempt from the 25% US tariffs also saw the biggest price appreciation in 2020.
For the first time on an annual basis, Champagne outperformed all other fine wine regions. Within the Liv-ex 1000, the Champagne 50 sub-index was the biggest mover, up 8.27%. The region was supported by successful and critically acclaimed releases of its 2008 and 2012 vintages.
The Italy 100 sub-index followed suit, up 6.72%. Like Champagne, the Italian market benefited from tariff exemption and critical acclaim, as strong Barolo ’16 and Brunello ’15 campaigns grabbed the trade’s attention. Collectors increasingly turned to the Piedmont for exclusivity, with the names of Gaja, Giacosa, Conterno, Vietti and Luciano Sandroni making waves.
The Rhone 100 index was the third biggest riser, up 3.64%.5 Although the Rhone is subject to tariffs, many of its wines achieve over 14% abv, making them suitable for exclusion. As recently examined, many of the Rhone wines have a strong following amongst US buyers, in part driven by Jeb Dunnuck and Robert Parker’s critical influence. In 2020, US buying accounted for over half (55%) of the Rhone’s market share by value.
Liv-ex 1000 sub-indices year-to-date
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