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market report

Liv-ex is an electronic exchange for fine wine used by professional merchants and collectors. Each month Liv-ex publishes a detailed Market Report analysing fine wine prices and trends in the marketplace. The Market Report is part of a package of data and services offered to subscribers of Liv-ex, with subscriptions starting at 39.95 per year.

Below is just a brief extract from the latest Market Report. An extract will be offered on wine-pages soon after it is published each month, but for the full report and Liv-Ex's extensive services, sign-up with them at www.liv-ex.com

Liv-Ex Market Report
by Liv-ex.com, September 2005

Trading
Activity in September set a new record for the Exchange. It was driven by several factors including the release of Yquem 2001 and speculation surrounding SIPPs (Self Invested Personal Pensions). Turnover was up 192% month on month and 208% year on year. Stock held by the leading UK merchants fell 4.6% for the month, while the Liv-ex 100 added a further 1.87%, taking its annual gain to 12%.



Breaking down September's trade by region, we saw Bordeaux dominate. It was the sort of domination that one would normally associate with an En Primeur campaign. Included in the 92.6% market share number is Yquem 2001, which alone accounted for 12.7% of total trade. But even without this, 80% is a large share for Bordeaux and requires some analysis (see Final Thought).
(detailed analysis by region and tables in full report)

Major Movers
The table below shows the major movers, month on month, in September. There is little surprise that the investment vintages from Bordeaux that so dominated the month are heavily represented amongst the gainers. Amongst the losers, there is little to note.


(Yquem, Latour and Lafite analysed in detail in full report)

Critical Corner
"The growing season of 2004 brought a return to more typical weather conditions [in Burgundy], which is to say it was a year that challenged growers at every turn." So said Steven Tanzer in his recent report on the vintage. Indeed is was a growing season that included an outbreak of oidium (mildew) in the early spring, a cool, humid and overcast August, intermittent hails storms, and then a warm and dry September!

Yields were up considerably on the minute quantities produced in 2003, but according to Allan Meadows in www.Burghound.com Issue 20, this has not led to a dilution in the wines: "One reason is that if there is a serendipitous by-product of the big yields, it's that most quality-minded producers pressed very lightly and thus obtained the best raw materials with which to work."

The bottom line it would seem is that growers were called upon to show their skills throughout and there is sure to be variation across the vintage. But one area where consistency looks to have prevailed is Chablis. "Chablis is the unquestioned star of this group, having produced classically styled, mineral-driven wines of unusually good transparency and wonderful freshness." says Meadows.



(complete table of 30 wines plus detailed analysis in the full report)

Final Thought
You will recall that in our July 2005 Market Report we flagged that SIPPs was coming. At the time we said, "no doubt, as with all these sorts of government initiatives, the devil will be in the detail, but what is clear is that it lends a good deal of legitimacy to fine wine as an asset class." Since then, and most notably in September, while the detail has remained elusive the market has (for some wines) been very strong. This has been helped by some fairly loose comments from one or two merchants coupled with poorly researched articles in the mainstream financial press, but the facts are the facts. Wine is in focus and the result has been staggering. Below we list the best performing wines over a three month period; July - August - September.


(extensive analysis of the trading history of these wines in full report)

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