The global economy sits on a knife edge. After a volatile 2023, how should we expect market conditions to impact fine wine in 2024?
Background
Though it’s still early days, wine prices (according to the industry’s benchmark index, Liv-ex) showed signs of stabilisation in January 2024. Nonetheless, much like the wider economy, seasoned investors remain in “wait-and-see” mode, leaving trading activity low, and consequently creating space for newcomers to seize interesting opportunities.
2023 was characterised by a price reset for fine wine. As geopolitical distractions rose, demand for luxury goods (including wine) dropped. Investors seeking exit were therefore forced into offering attractive deals to achieve sales. A major contributing factor was China’s isolationism –historically a driver of price inflation for wine, its wine imports declined significantly in 2023.
What’s next?
Optimist’s view
Should interest rates fall in 2024, purchases of fine wine in mature markets could pick up again, re-dynamising the market. While China’s state of absence is unlikely to change, newcomers from emerging markets such as the UAE, Malaysia and Indonesia could help boost demand, increasing the urgency to snap up mature stocks before prices rise again.
Conservative view
If the global economic outlook remains volatile in 2024, fine wine market activity is likely to stay quiet. Consequently, those seeking quick exit may need to compromise on price in order to sell. New wine releases (such as the Bordeaux en primeur 2023 campaign) will need to price conservatively to attract business, and opportunities for ultra-rare, highly prized treasures will be more available than usual.
Our approach
1275’s modus operandi is to advise clients on opportunities aligned with specific objectives for their collections, sourcing the relevant fine wines exclusively direct from the domains. As we don’t work on an inventory of wine for sale, we are instead able to leverage our established relationships with producer partners when opportunities arise, and when the time is right.
With this edge in mind, we maintain a cautious but optimistic outlook on fine wine in 2024. Whatever the market climate, our conviction in the importance of perfect provenance – a value-add that transcends fine wine’s secondary market pricing – never wavers. We welcome private individuals who share this passion, and seek to join our cohort of clients building 100% traceable, gold-standard wine collections. Together we are guardians of a precious legacy, preserving iconic wines today ahead of an uncertain tomorrow.