Burgundy index prices dip in 2019 after hitting all time high last year
Burgundy’s index prices of fine wines have dropped in 2019, after reaching a record high last year, when it oustripped global equities and gold.
However, since then prices have dropped, while wines from Champagne, the Rhone and Italy have gained momentum according to an annual report on the state of the international fine wine market by the London International Vintners Exchange, Liv-ex.
The report revealed that this year’s top 10 best-performing wines only included one from Burgundy, the area that produced the biggest price rises in 2018. This year, it’s been the worst-performing index, falling 7.3% while the Bordeaux 500 fell by 2.5%.
Traditionally, market analysts have drawn a correlation between wine and gold since both commodities have been considered impervious to inflation. However, gold outperformed fine wine in 2019, rising 14.3%.
“The purpose of the report is to inform the wider world about the activity on the fine wine market that year—in keeping with our vision to make the wine market more transparent,” says Justin Gibbs, Liv-ex director and co-founder.
Experts believe the changes in the fine wine market have come about as a result of a combination of political and economic factors, including Brexit uncertainty, the introduction of US tariffs on European wines, political turmoil in Hong Kong and the US China trade war.
The Champagne 50 and the Italy 100 were the only regional indices to see gains this year, rising by 2.2% and 4.6% respectively, in part from increased world attention as well as low entry price points into the market—and because both of these regions have been excluded from the 25% U.S. import tariffs.
The top-performing wine of 2019 was Giacomo Conterno, Barolo Riserva Monfortino, a 2002 vintage that grew 75% in value over the past year..
According to the report, Italy and Champagne are the most likely to continue benefiting in 2020, both in terms of price performance and trade share growth, while Burgundy will remain vulnerable due to its relatively high prices.