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WineCap: Q1 shows stabilising fine wine market with sensible pricing emerging

For the period January to March of this year, the ‘bid-to-offer ratio’ was “consistently increasing”, according to WineCap. A rising bid-to-offer ratio shows that the value of bids (a proxy for demand) is increasing relative to the value of offers (a proxy of supply). This can act as an indicator that prices could rise in the future.

The report said that this signalled “increased demand and growing liquidity”, as well as signs that the “market has established a solid floor” heading into Q2.

• Read more: Bordeaux trade confidence high despite low market prices

The report posits that geopolitical instability, wrought by the Middle East conflict that began in late February, could be driving investment into fine wine as a ‘safe haven’ asset – less risky during a volatile market environment compared to digital or equity assets. This is something WineCap defines as “defensive growth” for fine wine.

WineCap’s annual wealth management survey revealed that 50% of US and 35% of UK survey respondents believed that “global conflict actually helps fine wine perform during periods of market volatility in the sense that it highlights fine wine’s role as a psychological and financial refuge”.

WineCap believe that emerging stability and a market floor is also shown by sensible pricing strategies as a number of top names are reducing their release prices.

First growth Sauternes producer Château d’Yquem’s 2023 has been assessed as a “epochal” vintage, according to WineCap, with it being compared to the famed 2001 growing year. Despite this, the entry price to the market was set at 50% of 2001, with the trading platform highlighting this shows “the region’s role as a resilient financial refuge”.

Other sweet wine producers saw impressive Q1 price growth, Château Rieussec 2021 growing 55.6% so far this year, while Barsac’s Château Coutet 2016 and Château Climens 2012 grew close to 20%. Of the top 10 performing wines in Q1, eight were Bordeaux and four were sweet Bordeaux wines.

Other strong performances included Napa Valley’s Dominus 2017 which saw a 20.1% price uplift and Barolo Monfortino Riserva 2005 which gained 21%.

On the overall market picture, CEO at WineCap, Alexander Westgarth commented: “Fine wine’s physical nature provides a sense of security that digital or equity-based assets simply cannot replicate in a climate of uncertainty.

“We are seeing a ‘flight to safety’ where tangibility and independence from traditional market shocks are the primary drivers of value.”

Another notable development for fine wine was the signing of recent trade deals, with WineCap zeroing in on recent agreements with India, for both the UK and the EU. Premium wines from the UK and EU now entering India will have the imposed tariffs reduced from 150% to 100%, this figure dropping to 25% over the next 10 years.

To read the full report you can click here.

Image credit – phideg from Pixabay

• Fine Wine
• Bordeaux
• market
• Sauternes
• winecap
• bid offer ratio