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Fine-Wine Prices Sink to Year's Lowest Ebb

Fine-Wine Prices Sink to Year's Lowest Ebb
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Despite a rally in the first half of 2013, Bordeaux wine investors haven't had much to smile about this year.

With the end of 2013 in sight, the performance of fine wine as an alternative investment has sagged ever lower.

The barometer for fine-wine prices, the Liv-ex 100 Index, dropped to an all-year low in November, its latest Cellar Watch Market Report explains.

The Index fell by 2.5 percent – its largest monthly drop this year – taking it to its lowest level in 2013. While there was optimism in the first half of the year with gains recorded, the market has fallen back 1.8 percent in the year to date. In comparison, the FTSE has risen 12.8 percent in the same period, while the S&P 500 is up by more than 26 percent. However, fine wine has performed considerably better than gold, which has fallen by more than 25 percent in value.

It's not all bad news for fine wine. While estates from Bordeaux's Left Bank dominate the Liv-ex 100, and these wines have not been the flavor of the year, wines from Bordeaux's Right Bank, including Pavie, Angelus and Clos Fourtet, have seen major gains. Indeed, the Right Bank 100 has risen 7.6 percent in the year to date.

Collectors have extended their shopping lists even further afield, explained Simon Tam, head of wine, Christie's China. "When I first started back in 2011, the market was just Bordeaux, Bordeaux, Bordeaux. In a short time we are seeing, and selling very well, classic wines from Montalcino, Piedmont, wines from Spain – the great wines from Ribera del Duero,” he told Wine-Searcher.

Indeed, Bordeaux's share of trade has been running lower than usual throughout 2013, with Burgundy, Champagne, the Rhône and Italy taking up the slack.

Results from the wine auction market have shown that the appetite for wines beyond Bordeaux, particularly when sold direct from the producer's cellar, is at an all-time high. 

The impending annual results from the major auction houses will provide a useful indicator for the health of fine-wine sales. 

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