Today was another day of mayhem on the stock exchanges. The CAC- 40, the French stock market index, lost 9% of it's value which is the largest one-day-drop ever. Both the FTSE and the DAX are down 7% and Asia closed this morning showing losses of between 4% and 6%. As I write this, the DOW trades 780 points or 7.6% lower. On such a day, or rather a series of days with extreme uncertainty ranging to panic, it won't come as a surprise that fine wine prices are coming down as well.
One very good benchmark for fine wine prices is provided by the Vintage Wine Fund, according to their website "The only place one can find live quotes of both buying and selling prices on top end fine wines. All prices and available quantities are constantly updated and users can trade online at any time". I track their prices and since the 9th of September, the basket of wine they trade has dropped in value by just over 10%. Remember these are bidding and asking prices – they do not reflect actual trades.
Another widely quoted benchmark is the Liv-ex 100. This index represents a slightly wider range of Fine Wine and is mostly based on actual trades, so prices are more representative of the market. According to Liv-ex's blog, the index came down by a mere 3.7% in September. Compare this to the developments on the stock exchanges and I know where I'd rather put my money. Having said that, it's only fair to say that the volume traded is rather thin. As demand is low and supply is still fueled by sellers taking profits, the only possible result is a weakening of prices.
Normally, the months of October and November see heavy volume being traded as merchants start to stock up for Christmas. This year, we see the same trend but much more modest. That is, in Fine Wines. Champagne on the other hand is much more in demand, after a rather sluggish summer period. We will keep you closely informed of future developments. In the meantime, we try and make use of the good deals being offered. Check out our wine list - there are some real bargains to be had at easily the cheapest prices around.