"Fine wine prices could rise 14% this year." Headline news on Decanter’s website this morning – coming from The Wine Investment Fund’s investment manager, and former government economist, Chris Smith. He predicts a worst-case scenario of a fall of 5% this year in the Liv-Ex 100, with a rise of 25% “well within the bounds of possibility.”
Economic environment, a dismal En Primeur Campaign, and a high level of net sales by professional asset managers were the three main factors, according to Smith, which caused last year’s downturn in the wine market, with conditions now appearing much brighter.
Smith gives 3 main reasons for optimism in 2013: The falls in 2012 took place in the first half of the year, with the second half of the year seeing a return to stability and some recovery; Prices have fallen to below trend, potentially allowing for a sharp recovery; And, the institutional sales have fallen away. (Click here to read the full article).
“We believe that now may prove to be as good a time to enter the market as we have seen since 2009,” Smith said. We’re inclined to agree with Smith, particularly because “the risk profile of the market compares much more favourably to recent years.”
To add to this, the MSCI Asia Pacific Index closed at its highest point yesterday since August 2011. In the past, there has been a correlation between this index and fine wine prices as measured by the Liv-Ex 100. Interestingly, the Liv-ex 100 now is 32% lower than it was in August 2011, suggesting that – if the correlation still exists – the Liv-Ex 100 has some catching up to do.
The Liv-Ex 100
Should you agree that now may prove to be as good a time to enter the market as we have seen since 2009, please see below for some recommendations that look particularly attractive.
Hermitage La Chapelle 2010 – £540/ case (6x75)
96+ Robert Parker
(2009 market price £700/ case – 97 Robert Parker)
Guigal La Mouline 2005 – £2,500/ case (6x75)
100 Robert Parker
(1999 market price £3,250 – 100 Robert Parker)
Pontet Canet 2010 – £1,295/ case (12x75)
96-100 Robert Parker
(2009 market price £1,550 – 100 Robert Parker)
If you require full tasting notes, or more information, please do not hesitate to ask. Alternatively, please do get in touch to discuss any needs you might have.
Wines offered subject to availability.