Have fine wine prices fallen?
Yes. Prices of almost everything have fallen in recent weeks; fine wine is no exception. See the latest Decanter.com story titled "Fine wine prices hit new low."
By how much?
The article reports that the Liv-ex 100 Fine Wine Index fell 12.4% in October. Interestingly, that is almost identical to the median 13% decline discussed in my September 27th post, "Time to invest in fine wine?" and close to the 15% median price decline in sold lots at the October 25th Zachys auction in Hong Kong. The broader Liv-ex 500 fell only 1.8% in the month.
Why is the unsold rate at recent auctions reaching as much as 30%?
Keep in mind that auction estimates and reserves are typically set 8 weeks before the auction date. Given the sudden change in the financial market environment in mid-September, it's no surprise that the current values people will pay are below what the auction houses estimated prior to the financial market turmoil.
Is the fine wine market collapsing?
No. The Zachys Hong Kong auction still sold HK$41.3 million of wine (approx. US$5.3 million) and about 25% of the sold lots were above their 2008 auction average through August (pre-decline).
Is fine wine still a good investment?
Yes. I stand by my recent post "Why wine investing beats stock investing." Moreover, Stephen Browett of Farr Vintners, who claim to sell more Bordeaux than anyone else in the UK, makes a compelling argument in his comments after the Decanter article. He notes that despite price declines in some wine that Decanter singles out, those wines are still selling for 30%-40% more than 18 months ago.
Vinfolio's new offer to wine investors: 5 years of free storage!
As an incentive to give wine investing a try, we'll give you a total of 5 years of free storage when you do the following:
- Buy at least $5,000 of wine in a single purchase where the average bottle price (750ml equivalent) is $100 or more. Better yet, speak with one of our wine specialists for recommendations and then the next step is automatic.
- Call or email our Customer Service team (service@vinfolio.com, 415-946-1300) or your wine specialist within one week of your purchase to claim your storage credits (which you can use on any wine).
- This offer is effective only with new purchases starting today (November 7, 2008) and is exclusive of other promotions.
