The Fine Wine Market in 2024
Introduction
2024 has, to put it mildly, been a challenging year for the fine wine market. Prices have continued to fall, risk aversion has continued to hold sway, and participants have continued to tiptoe their way through a market that is searching for signs of the bottom.
The Liv-ex Fine Wine 100, the industry benchmark, is down 9.2% year-to-date. Meanwhile, the Fine Wine 50 (which tracks the movements of the First Growths) and the Fine Wine 1000 (the broadest measure of the market) are both down 11.1%. The downturn has accelerated since the end of the Northern Hemisphere summer, with the Liv-ex 100 recording its two largest falls of the year in September and November.
While prices have continued to fall, market participation has remained high. Trade count is 5.5% above last year. However, in a sign of buyers’ reluctance to take on stock that they can’t quickly sell on (or broke through straightaway), trade volumes are down 1.9% on 2023.
2023 saw the end of a 10-year streak of record number of unique wines (LWIN11) and brands (LWIN7) traded on the market. 2024 is on track to record a similar or greater number of LWIN11s and LWIN7s traded as 2022.
Wines traded on Liv-ex
As we reported in the 2024 Power 100, the brands that have fared the best this year tend to be wines produced in good volumes and released at prices that invite both buying and, crucially, drinking. In a market racked by low confidence, these attributes signify the least risky bets. Moreover, with a significant stock overhang blighting the market, wines whose prices encourage consumption and, thus, a heathier demand-supply balance are best-placed to weather the storm.
Liv-ex indices vs equities
The Liv-ex Fine Wine 100 and 1000 have underperformed all major equity markets and, notably, Gold over the past 12 months. While the impact of Trump 2.0 remains to be seen at a macroeconomic level, the S&P 500 has enjoyed an uptick since the election. Meanwhile, reports out of the US fine wine market over November convey uncertainty, with a number of participants deciding to wait and see what the possible reintroduction of tariffs means before taking on more stock.
Currency overview
As inflation has returned to healthier levels in the US, Europe and the UK, the second half of 2024 saw interest rate cuts in each geography. With cuts by the European Central Bank and Bank of England over the Northern Hemisphere summer anticipating a similar move from the US Fed in October, Q3 was marked by US Dollar strengthening. The result of this was felt in an increase in US buying share from 34.5% in Q2 to 39.9% during Q3.
Beyond tariffs, a key consideration for what to expect in the US market over Trump’s second term is what happens to the USD. It has rallied since the election results, and if it were to further strengthen, it might just mitigate the impact of tariffs. Nevertheless, with, on the one hand, rate cuts promised and, on the other, an anticipation of increased inflationary pressure, it remains to be seen what Trump 2.0 will mean for the USD.
Buyer geography overview
Over the longer-term, US buyers have played an increasingly significant role in the market. Year-to-date they have accounted for 34.8% of trade. This is up from 25.7% in 2023 and will result in the US taking the greatest share of purchases for the first time. Notably, the US is the only geography in which total value of purchases is up on 2023 (+16.0%).
The uncertainty that has ratcheted up in the US over the past month is therefore something to monitor very closely as we head into 2025.
Regional breakdown of trade
Bordeaux loses trade share
2024 has seen Bordeaux’s share of regional trade fall. This is a reversal of what we saw last year, and a return to the longer-term trend which has seen the market diversify away from Bordeaux’s historic dominance. In a downmarket, this is notable.
Last year we suggested that in a risk averse market, buyers gravitate towards the safest bets. Given its volumes, well-understood mechanics and number of well-established brands, it appeared that Bordeaux represented that safe bet. However, with its share of trade down, that appears to no longer be the case. Along with a subdued Chinese market, the reason why this is the case is most likely ineffective release prices and the knock-on effect they have on the demand-supply balance.
The bid:offer ratio of the Bordeaux 500 has hovered around historic lows throughout the year. Sheds are full of stock at no little expense. As the market searches for a clearance price, the number of Bordeaux wines trading beneath ex-château release prices is the highest it’s been since 2015. In short, at each step of the supply chain after the wine leaves the château, participants are more likely to be making a loss than before.
However, this is primarily an issue with vintages post 2015. Pre-2009 Bordeaux, hailing from a different era of release pricing and benefiting from consumption-based scarcity, has been more resilient. We see this when we compare the combined bid:offer ratio of the Liv-ex 50 and the Right Bank 50 (which track the most recent vintages of the First Growths and blue-chip Right Bank producers) with the Bordeaux Legends 40 (which tracks the performance of great back vintages of blue-chip Bordeaux from both Banks). The former sits at 0.42, the latter at 0.59.
Italy – holding firmer than most
While still down 6.0% year-to-date, the Italy 100 has weathered the storm better than any other sub-index of the Liv-ex 1000.
At the same time, the trade count of Italian wine is up 17.6%, trade volume is up 17.3%, and trade value is up 9.8%. Interestingly, the count of unique Italian brands traded is up 1.8% on 2023, while the count of unique wines (brand + vintage) is up 11.3%. Buyers are purchasing a wider range of Italian vintages. Specifically, this has been driven by US buyers, where the total value of Italian wine bought is up 69.3% on last year.
While last year it was Piedmont that represented the Italian face of resistance, in 2024 it is overwhelmingly a story about Tuscany. Trade value for Tuscan wine has risen 16.1% compared to 2023. This compares to a 5.2% fall in trade value for Piedmont. We see this in the percentage change in trade value for the 10 most-traded Italian brands by value.
Top 10 Italian brands by Trade Value change
Ornellaia stands out as the only leading Tuscan wine whose trade value and rank has fallen over the past year. While the remainder of the leading Tuscan brands have increased their trade value, their Piedmontese counterparts have slipped. This is reflected in the performance of the Tuscan and Piedmontese components of the Italy 100, down 3.0% and 9.5% respectively. Expanding the pool to include all wines from each region, across the year fewer Tuscan wines have tended to fall in price compared to their Piedmontese counterparts.
Tuscany Risers to Fallers
Piedmont Risers to Fallers
Digging deeper into Tuscan performance, it’s clear that it isn’t just Super Tuscans that have performed well, with leading Brunello (and declassified Brunello Soldera Case Basse) also trading more than last year. Masseto and Soldera – different grapes, different types of brand, but both produced in low volumes – benefit from scarcity and have traded in significantly higher value than last year. They are also two of the most expensive Tuscan wines.
Sassicaia represents the other side of the coin. Produced in higher volumes and trading at moderate prices, it has performed relatively well in 2024. The 2021 and 2020 vintages are the two top-traded Italian wines by value year-to-date. As a sign that the market deemed the 2021’s international release price of £2,500 per 12×75 acceptable, trade has been very consistent at that level.
Sassicaia 2021 Liv-ex trades
A word on spirits
While still at a relatively low level, there has been a noticeable uptick in spirits trade. Year-to-date the total value of spirits traded is up 140.6%. This has been driven by a surge in trade for Scotch, up 244.8% on last year. This comes at the expense of Japanese whiskey, whose trade has fallen 12.8%.
Top-traded wines by value
Lafite highlights Bordeaux’s current dilemma. Two of its vintages feature in the top 10 most-traded wines by value. Across all vintages it accounts for 4.8% of all traded value year-to-date. Yet prices continue to fall. The 2019’s last trade struck 17.1% below its international release price, the 2018 16.8% below. Both appear to have found support at their ex-négociant release prices.
Grande Marque Champagne continues to trade in significant value and volume. In a market where buyers have tended to be reluctant to take on stock, instead preferring to broke straight through, Champagne’s consistent levels of consumption make it an appealing option. Nevertheless, the market correction of Cristal 2015 has been significant. It last traded at £1,704, a 34.5% discount on its international release price of £2,600.
Vega Sicilia Unico has been one of 2024’s few bright spots, and shot to the top of the Liv-ex Power 100. Starting from a relatively low level, trade value is up 455.8% on last year, and trade volume is up 475.0%. This increased demand has come partly from European buyers (up 278.5%), but primarily from a dramatic surge from the US (up 855.3%).
Vega Sicilia Unico 2013 trades on Liv-ex
Top-traded wines by volume
Château Beychevelle stands as an anomaly in the Bordeaux 2021 vintage. The 2021s have come under increasing price pressure over recent months. The effects of a notoriously unsuccessful En Primeur campaign have been felt with a number of wines trading beneath their ex-château release prices. Beychevelle 2021 traded in significant volume in the first part of the year between £762 and £812 per 12×75, 7.9%-15.0% above the international release price (£706). The second half of the year has seen trade prices drop to between £621 and £718, between 12.0% below and 1.7% above the release price.
Beychevelle 2021 trades on Liv-ex
Being crowned Wine Spectator’s 2023 wine of the year continued to benefit Argiano Brunello di Montalcino 2018 into 2024. While it had a clear impact on trade volumes, it also surely led to an increase in trade value. Released internationally at £330 per 12×75, its lowest trade price is £470.
Produttori del Barbaresco, Barbaresco 2020 is a story of great quality at everyday drinking prices. Awarded 92 points by Antonio Galloni (Vinous), it has seen strong demand from the US, where buyers have accounted for 89.3% of trade value year-to-date.
Conclusion
The challenges that the market has faced in 2024 are undoubtedly set to continue into 2025. What is less certain is the impact that Trump 2.0 will have. Tariffs appear a certainty. While there is a concerted effort underway by the US trade to make the case against tariffs on wine imports, the outcome is not yet clear. However, the effect of tariffs cannot be taken in isolation. The impact of forex and a wider US macroeconomic context will play an important role. Nevertheless, markets do not like uncertainty, and with US buyers playing a increasingly prominent role, further unpredictability is not going to be met with open arms.
Weatherwise, 2024 has been an annus horribilis in Bordeaux and Burgundy. While this is in no way welcome news to most growers, in a market beset by oversupply, it might be a blessing in disguise. With a small and low quality set of Bordeaux 2024s set to be released in 2025, it represents an opportunity for châteaux to reset. There are rumours of châteaux considering a 40% reduction on 2023 release prices, which were themselves c.25% down on 2022. This would return prices to where they were in 2008. Would this be enough to inspire a sell out of the small crop of 2024s, which are destined for early drinking rather than long-term cellaring? And would this entice the new generation of Bordeaux collectors to start filling their cellars? A small crop to some degree mitigates the risk to the brand, and could give châteaux the confidence to release at prices that benefit each stage of the supply chain.
For Burgundy, before attention can be turned to the 2024s, January will see the release of an abundant set of 2023s. While surely tempting to preemptively account for limited cashflow coming from the 2024s, it is unlikely that the market would react well to 2023s released at the same level as the 2022s. The bid:offer ratio for the Burgundy 150 sits at 0.16 compared to 7.35 at the peak of the bull run. That is a clear indication of current sentiment.
Perhaps one silver lining is that the downturn appears to have picked up pace over recent months. If this continues into 2025, then it will hasten the point at which prices are low enough to truly reinvigorate demand and clear out excess stock. The question is whether the market is ready to bite the bullet.
Liv-ex analysis is drawn from the world’s most comprehensive database of fine wine prices. The data reflects the real time activity of Liv-ex’s 620+ merchant members from across the globe. Together they represent the largest pool of liquidity in the world – currently over £145m of bids and offers across 20,000 wines.