On their news website, the BBC have placed this article. We have been commenting on the recent price fall several times in this blog, so it comes as a bit of non-news. In the article though, Berry's uses the example of Lafite Rothschild 2005 falling in price from the high of gbp 10,000 to gbp 7,500. Interestingly, you can pick up this wine from Ditton Wine Traders for gbp 6,500 – proving our point that our prices are very difficult to beat.
There are more and more signs that the recent, steep fall in prices is starting to halt. Whilst volume of trade in especially October was low, we see that more and more buyers are bargain hunting at the new prices levels. Where 2 weeks ago stock was being offered cheaply without finding a buyer, we now see more and more of the same stock being snapped up and even slightly increasing in price again. There's an interesting article on this in Decanter, with views from various people in the trade.
To add some more background to yesterday's blog entry, Decanter have asked Liv-ex to comment on price developments. Here's what they say: "Fine wine prices hit new low". Interestingly, Liv-ex see that prices have more or less stabilized in the last 2 weeks, after the very steep drop in October. Personally, I think we have not seen the bottom quite yet although we can't be too far off. The latest auction by Hart, Davis Hart in Chicago, on November 1st, shows encouraging sell through rates, with only 8 lots out of 1,128 remaining unsold.
In the last few weeks, we have seen Fine Wine Prices coming down rather rapidly. Reuters have just published an interesting article on this, "Global credit crisis puts damper on wine prices". Auction houses see their sell-through rates dropping and prices as compared to only 6 weeks ago are significantly down. When looking at the Livex 100, the widely quoted Fine Wine Price Index, we see a drop of 16% from the high in August.
Well well, it’s been quite a week. We’ve seen a meltdown in the financial markets that has unsettled even the most experienced players. In fact, it took on such proportions that there was a very real, systemic risk of the whole financial system breaking down. Not surprisingly, this has triggered a global response from governments. After the US took the initiative in announcing measures, it now seems that the UK has initiated the right response in buying stakes in the troubled banks, forcing them to own up to a much larger figure of cash needed than they previously communicated.
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.