When he was Chancellor Gordon Brown famously predicted an end to boom and bust and we know how that ended. Curiously James Miles, MD of Liv-ex stated recently in a speech at the Hong Kong International Wine & Spirits Fair that he believed that the natural cycle of the fine wine market is here to stay by demonstrating that the last decade has been fairly normal by historical standards and that speculative bubbles were not new. He cited the fact that Cru Classe prices quadrupled between 1970 and 1972 only to be eroded by 1974 and that most of the leading negociants of the time were wiped out.
Recently an upturn in demand since the summer has seen the market turn a corner but Miles quite correctly believes that the speed of recovery depends heavily on how the 2014 vintage Bordeaux en primeur campaign is handled. He feels that prices will still have to fall but wonders whether the chateaux owners realise this ? However he contends that fine wine as an alternative asset class is here to stay, which was backed up by the 2012 Barclays survey that found that 25% of high new worth individuals had 2% of their wealth tied up in fine wine. Please click below for Liv-ex’s most recent market report.