Liv-Ex 50 Wine Index Heads for Second Straight Quarterly Decline

The Liv-ex Fine Wine 50 Index is heading for its second consecutive quarterly decline after price gains in the first 10 weeks of this year and in late August lost momentum amid lack of demand for the 2012 vintage.

The index, which tracks the 10 most recent available vintages of the five Bordeaux first-growth wines, is a benchmark for the London-based Liv-ex online exchange and broader international trading in investment-grade wines.

The index has declined since mid-March, apart from a brief rally in late summer, paring an 8 percent gain at the start of the year to leave it 2 percent up since the end of December, according to data on Liv-ex’s Cellar Watch website. Price cuts of 20 percent or more for the Bordeaux 2012 vintage sold as “en primeur,” or futures, relative to the previous year have been insufficient to spark buying, although wine fund managers point to the longer-term track record of wines from the region.

“Despite the major correction in Bordeaux, we are still better off having traded in that market rather than most of the northern and southern Rhones since inception,” William Beck, partner of London-based Wine Asset Managers LLP, which has $20 million under management, said in a market report this month.

Bordeaux Market

The Liv-ex 50 index is heading for its fifth monthly drop in the past six, and its sixth quarterly decline in the past nine. While it is still up year-to-date, an extension of the price trend seen since mid-March risks leaving it down at the end of 2013 for the third straight year.

While the Liv-ex 50 tracks only wines from the top left-bank Bordeaux estates of Chateau Lafite-Rothschild, Chateau Mouton-Rothschild, Chateau Latour, Chateau Margaux and Chateau Haut-Brion for vintages from 2001 to 2010, the exchange also has broader indexes published monthly.

The Liv-ex Bordeaux 500, tracking wines from 50 wine producers across the region, gives a broader view of the market. At the end of August it was still showing a gain of almost 5 percent since the start of the year. September data will be available after the close of the month.

The Liv-ex Fine Wine 100, while still Bordeaux-dominated, also tracks wines from Burgundy, the Rhone, Champagne and Italy, and at the end of August was similarly showing an advance of close to 5 percent since the end of 2012.

Before it's here, it's on the Bloomberg Terminal.