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Looking back on 2023

2023 Fine Wine Market Review

2023 in fine wine is best characterised by the mark down phase of a market cycle. The wine investment market has yet to see a bear market (a decline of greater than 20% from its highs), however it is fair to say fine wine is in a corrective phase with the two benchmark indexes, the Liv-Ex 100 and Liv-Ex 1000 down 14.1% and 13.7% respectively.

A number of macro factors and an overzealous primary market contributed to the decline of the fine wine market in 2023. Firstly, the UK suffered higher inflationary pressures than the EU or America. This was due to a strong reliance on natural gas with prices surging due to the Ukraine war and a tight labour market with supply issues from Brexit.

In response to the rising inflation, the Bank of England (BOE) increased the base rate from 3.5% in January to 5.25% in August, which has since been maintained. In response to the rise in UK interest rates, the Sterling rose vs both the Dollar (+5%) and the Euro (+3%). This created an FX headwind for wine buyers outside of the UK as the predominant currency of the secondary fine wine market is Sterling.

Secondly, the International Monetary Fund (IMF) downgraded global economic growth from 3.5% in 2022 to 3.0% in 2023 and 2.9% in 2024. This is well below the historical (2000-19) average of 3.8%. Fine wines are often considered luxury goods, and the purchasing power of wealthy individuals and high-net-worth collectors greatly influences market trends.

Lastly, higher global interest rates detracted investors from fine wine. The opportunity cost of a higher, risk-free rate makes the risk premium for holding fine wine less attractive.

The primary fine wine market also had a stuttering effect on secondary market sentiment in 2023. The increase in primary market pricing, which can only partly be explained by inflation, had merchants, collectors and investors confused as RRPs did not align with the secondary market or the macro backdrop.

2023 Fine Wine Market vs Other Asset Classes

2023Liv-Ex 100Liv-Ex 1000FTSE 100S&P 500GoldCrude Oil

Standard Deviation

Sharpe Ratio-3.76-5.90.361.721.31-0.43
Correlation Coefficient81.02%100%13.88%-13.18%19.68%


Firstly, from a risk perspective, fine wine as demonstrated by the Liv-Ex 100 and 1000 had the lowest annualised standard deviation of monthly returns vs all other asset classes. This is a measure of how volatile an assets dispersion is against its average.

The top performer in 2023 from both a returns and risk adjusted returns (Sharpe ratio) perspective was the S&P 500 followed by Gold.

Lastly comparing the various asset class returns to that of the Liv-Ex 1000, we can determine how closely they are correlated. From the table above we can see that both the equity and commodity assets have a correlation coefficient less than +/- 20%, demonstrating a weak to zero relationship between the two classes. This highlights fine wine’s diversification benefits as part of a larger portfolio.

2023 Fine Wine Regional Performance

2023Bordeaux 500Bordeaux Legends 40Burgundy 150Champagne 50Rhone 100Italy 100Rest of the World 60
Standard Deviation2.81%3.32%3.56%4.15%6.03%3.17%3.6%
Sharpe Ratio-4.03-3.77-4.54-4.41-3.25-1.9-3.6

Looking at the regional indices of the Liv-Ex 1000 we can see that Bordeaux has the lowest volatility off all the investment regions. This has historically been the case and has continued in 2023.

The Italy 100 index recorded the smallest decline and best Sharpe ratio in 2023. Traditionally Tuscan wines have been the top contributors to the index however in H2 2023 wines from Piedmonte outperformed.

Source: Liv-ex Feb 2024

The best performing wines in 2023 were not the prestigious first growths but instead Sauternes from Château Climens and Château Coutet. A change of ownership at Climens seems to have sparked some interest in this often-overlooked region.

Best Performers from the Liv-ex 1000 Index

WineVintageRegionMid Price Dec 22 (12*75cl)Mid Price Nov 23 (12*75cl)Change
Ch Climens, 1er Cru Classe, Barsac2010Bordeaux£400£59849.5%
Joseph Drouhin, Montrachet Grand Cru, Marquis de Laguiche2018Burgundy£6,033£8,73044.7%
Giacomo Conterno, Barolo, Monfortino Riserva2001Piedmont£8,993£12,60040.1%
Domaine Jean Louise Chave, Herimtage, Rouge2019Rhone£2,462£3,44239.8%
Joseph Drouhin, Montrachet Grand Cru, Marquis de Laguiche2017Burgundy£7,266£9,90036.3%
Ch Coutet, 1er Cru Classe, Barsac2014Bordeaux£238£31733.2%
Ch Climens, 1er Cru Classe, Barsac2007Bordeaux£571£73929.3%
Fontodi, Flaccianello delle Pieve, Colli della Toscana Centrale2011Tuscany£697£89528.4%
Ch Coutet, 1er Cru Classe, Barsac2010Bordeaux£308£38926.5%
Ch Palmer 3eme Cru Classe, Margaux2013Bordeaux£1,544£1,92524.7%

The bid offer ratio on the Liv-Ex measures the number of bids on the exchange versus the number of offers, and the change in the ratio over time can be used to indicate market sentiment. It is important to note regions with higher liquidity will naturally have higher bid offer ratios.

Source: LIv-Ex Feb 2024

The largest ratio delta in 2023 was Burgundy, decreasing from 0.55 to 0.1. The lower bid offer ratio shows fewer buyers on the exchange and could lead to lower pricing in 2024.

Source: Liv-Ex Feb 2024

Interestingly White Burgundies outperformed Red Burgundies in 2023 as was the case in 2022.

Both Bordeaux and Champagne’s bid offer ratio dipped into summer before recovering. A rebound in the bid offer ratio is a leading indicator for an increase in pricing as buyers return to the market.

Tuscany’s ratio remained consistent throughout 2023 while Piedmonts ratio dipped in Q4, contradicting the strong Q4 performance of Piedmont wines in the Liv-Ex 1000. The bid offer ratio however not a perfect science is a good indicator of future performance based on buyers entering the market.


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Picture of Matthew Small

Matthew Small

Following a career in Investment Banking, Matt is fascinated by tracking and understanding the analytics of the fine wine market. He works with our investor clients, helping them to build robust, diversified portfolios with long-term earnings potential.

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