Fine wine continues to have a good run.
In May the wine indices rose by 0.4% (Liv-ex 100) and +0.5% (Liv-ex Investables).
The market was helped by a drop in sterling during the month with the pound falling by 1% against the US dollar, and by slightly more against the euro, yen and renminbi.
The focus has been the en primeur release of the new Bordeaux vintage, the 2016s.
Andrew della Casa, founding Director of The Wine Investment Fund (TWIF), which also runs the Huntsman Wine EIS, said that:
“Virtually all wines have now been offered and, looking at the euro-based château release prices, most have seen sharp price increases compared to the (equally lauded) 2015s. These price rises have then been exaggerated further once converted to sterling, thanks to the 12% fall in the pound since last year.
“Fifteen to twenty of the most sought-after names have sold well. These chateaux have tended to release small quantities, keeping back the bulk of their production for later sale. This has enabled merchants to put ‘sold out’ signs on these wines and to discuss allocating only to favoured clients – both of which are useful strategies for driving further demand. The low release quantities make the situation rather artificial, though. There are also plenty of wines where the prices are too high, particularly in sterling terms, leading to criticisms from some in the UK trade.
“Otherwise the market background remains healthy; demand is robust and supply for the more mature vintages in which TWIF deals is still constrained. Following the primeurs there may be a final flurry of activity before the usually quiet July and August.
“Overall, in the absence of significant exchange rate movements, TWIF expects a trend of steadily increasing prices over the remainder of 2017.”