global trade Archives

Executive summary

Q4 was marked by political developments, changing economic policies, and geopolitical events, including the re-election of President Trump.
The strengthened US dollar boosted fine wine demand across the pond.
Fine wine prices fell 11% across major regions in 2024, reflecting a continued market correction.
Italy was the most resilient fine wine region, while Burgundy experienced the biggest adjustment.
Rhône wines dominated the list of the best performing wines in 2024, with Domaine Pegau Cuvée Réservée Rouge 2013 leading (80.5%).
Older vintages (2010-2014) performed well, reflecting the market’s preference for mature, proven wines, while new releases struggled when not priced correctly.
Optimism for market recovery is focused on premium regions like Piedmont, Champagne, and Burgundy.
Economic uncertainties and mixed performance in Bordeaux are expected to persist, but continued interest in fine wine signals resilience and potential for long-term growth.

Q4 in context: political and economic drivers

It has been an eventful quarter, marked by political developments, changing economic policies, and geopolitical events. The re-election of President Donald Trump in November prompted a rapid response in global markets. US equities reacted positively to the outcome, as investors anticipated business-friendly policies and potential fiscal stimulus, particularly benefiting sectors like manufacturing and technology. However, concerns over increased tariffs created uncertainties for multinational corporations.

Rising US Treasury yields, driven by expectations of future interest rate hikes, attracted capital inflows, strengthening the US dollar. While this reinforced investor confidence in U.S. economic policies, it also raised concerns about higher borrowing costs and their potential drag on economic growth. Emerging market currencies faced downward pressure as fears of US trade measures and capital outflows grew.

In late November, a US-France-brokered ceasefire between Israel and Hezbollah took effect, reducing immediate geopolitical risks after over a year of hostilities. Despite the agreement, markets remained cautious, keeping a close watch for potential disruptions to the fragile stability.

Markets in 2024: the year that was

Bitcoin made headlines this month by surpassing the $100,000 mark for the first time, peaking at an all-time high of $104,000 on Coinbase. The surge was fuelled by growing investor optimism around a favourable regulatory environment under President-elect Donald Trump, who has signalled support for cryptocurrencies through key appointments and policy proposals.

Equity markets have also enjoyed a strong year, bolstered by a resilient US economy and easing inflation pressures. These conditions have allowed central banks to pause or slow rate hikes. Strong corporate earnings, particularly in the technology and AI sectors, have further propelled the S&P 500’s stellar performance.

The global energy market in 2024 has experienced notable fluctuations. Concerns over a potential global economic slowdown, driven by weak demand from China and other developed economies, have weighed on crude oil prices. While OPEC’s production cuts have provided some price support, they have not been sufficient to fully offset the impact of declining demand.

Meanwhile, gold has reaffirmed its role as a safe-haven asset in 2024. Persistent geopolitical tensions, inflation concerns, and financial market volatility have driven demand for the precious metal, supporting its strong performance throughout the year.

*Current values: 06/12/2024

The fine wine market in 2024

The fine wine market in 2024 continued its downward trajectory from 2023, with broad declines across major indices. The Liv-ex 100 has fallen 9.2% year-to-date, while the Liv-ex 50, which tracks First Growth Bordeaux, is down 10.9%.

Despite these overall declines, the market showcased notable regional disparities and emerging opportunities. Examined at more length in the following section, Italy has been a beacon of resilience, while ‘overheated’ regions like Burgundy have readjusted.

Notably, prices did not fall because of lower demand for fine wine. Market activity remained high, with the number of fine wine trades in 2024 surpassing 2023 by 7.9%.

Regional fine wine performance

The fine wine market saw mixed performances as the year drew to a close. Italy stood out as the most resilient region, with prices falling 6% – a fraction of the 11.1% average decline in the Liv-ex 1000 index. High-scoring releases buoyed Italy’s secondary market, while diverse offerings such as Antinori Brunello di Montalcino Vigna Ferrovia Riserva (38%) underscored the country’s stability and value. Italy’s growing influence was evident in the 2024 Power 100 rankings, where it claimed 22 spots – nine more than last year – closing the gap on Burgundy and Bordeaux in terms of investor interest and price performance.

Burgundy has faced the greatest readjustment among all regions, with prices declining by 14.4% year-to-date. This correction followed years of meteoric growth and reflects a market adjustment as prices recalibrate. The decline has created opportunities for investors to acquire rare and prestigious labels at more accessible prices. Burgundy’s reputation as a cornerstone of fine wine investment remains intact despite this year’s setbacks, with long-term demand likely to persist.

Champagne also experienced a challenging year, with prices falling 9.8%. However, the region showed signs of stabilisation toward the end of the year. Older vintages led this recovery, with labels such as Taittinger Brut Millesime up 29%, signalling enduring interest in high-quality, aged Champagne.

Bordeaux, the largest and most liquid fine wine region, saw an 11.3% decline. Liquidity remains Bordeaux’s strength, but it no longer guarantees safety in today’s market. Recent vintages in particular have struggled, with many trading below their release prices.

California wines fell 8.6% but showed positive momentum in November. The region’s growing presence in the fine wine investment space has been driven by the rising popularity of brands like Dominus, Joseph Phelps, and Promontory.

Spanish wine also benefitted from surging US demand, with Vega Sicilia Unico taking the top spot as the most powerful fine wine brand in 2024. Two other Spanish wines also made the rankings – Dominio de Pingus and R. Lopez de Heredia – a testament to Spain’s growing investment potential.

The best-performing wines in 2024

The Rhône dominated this year’s top-performing wines, claiming four of the ten spots on the list. Domaine de Pegau Cuvee Reservee Rouge 2013 led the charge with an impressive 80.5% rise. Other regional standouts, including Clos des Papes Châteauneuf-du-Pape Rouge 2014 (61.2%) and Château de Beaucastel Rouge 2013 (31.1%), highlighted the enduring demand for Châteauneuf-du-Pape from highly rated, older vintages.

Beyond the Rhône, Spain’s Vega Sicilia Unico 2010 (24.9%) showcased the strength of Ribera del Duero as a rising force in the wine investment market. Vega Sicilia also ranked as the most powerful wine brand in the 2024 Power 100 rankings.

Bordeaux and Sauternes also featured. Château Rieussec took two spots with its 2015 (10%) and 2014 (7.2%) vintages. Meanwhile, Ducru-Beaucaillou 2013 (19.2%) and Château L’Eglise-Clinet 2012 (3.9%) showed that Bordeaux’s established names have continued to attract investment interest where there has been value on offer.

A clear trend this year was the strong performance of older vintages, with wines from 2010 to 2014 dominating the list. Only two ‘younger’ vintages, 2015 and 2019, appeared on the list and no new releases. This aligns with a broader preference for mature wines, which offer proven track records and immediate drinkability.

2024 takeaways

The market downturn has presented opportunities to acquire premium wines at more accessible price points, offering a chance to diversify portfolios with an asset known for its historically strong long-term performance.

For another year, Bordeaux En Primeur struggled to attract significant interest with the release of the 2023 vintage, especially for wines where older proven vintages offered better value. Economic uncertainty further highlighted the appeal of the classics. Iconic Bordeaux vintages – such as 2000, 2005, and 2009 – and Italy’s Super Tuscans stood out as stable investment options. These wines offered a combination of historical performance and consistent demand, reinforcing their status as cornerstone assets in fine wine portfolios.

Declining prices also brought rare and prestigious wines back into circulation, offering investors the chance to secure assets that were previously inaccessible. This period allowed for strategic acquisitions of iconic labels at attractive price points, setting the stage for potential long-term gains as the market stabilises.

Below the surface of the downturn, 2024 presented great buying opportunities, making it a pivotal year for investors, whether looking to enter the market or enhance their existing portfolios.

2025 market outlook

The 2025 fine wine market outlook is cautiously positive, driven by optimism for premium regions such as Piedmont, Champagne, and Burgundy. Insights from the 2024 Golden Vines Report show that 64% of industry professionals anticipate market growth, particularly for high-end Italian wines like Barolo and Barbaresco, which are increasingly viewed as alternatives to Burgundy.

Key trends include rising demand for sustainability and terroir-driven wines. According to the report, Piedmont (20%) leads in growth potential, followed by Champagne (17%), Burgundy (14%) and Tuscany (12%), while Bordeaux faces mixed prospects, with 27% of the respondents expecting further declines. Challenges like economic pressures and geopolitical uncertainties persist but continued strong fine wine demand signals resilience in the market.

Fine wine remains the most popular collectible celebrated for its diversification benefits, sustainability and stability through different market environments.

Stay tuned for our 2025 Wealth Report, which will examine wealth and investment managers’ views and sentiments towards fine wine early next year.

WineCap’s independent market analysis showcases the value of portfolio diversification and the stability offered by investing in wine. Speak to one of our wine investment experts and start building your portfolio. Schedule your free consultation today.

As an internationally traded asset, fine wine is affected by economic and political factors including trade wars and tariffs.
Demand for certain wines and regions can shift as tariffs directly impact pricing, availability and liquidity.
Diversification and strategic investment are key to navigating the fine wine market amid trade wars and tariffs.

Over the past two decades, fine wine has transitioned from a luxury product to a well-established internationally traded investment asset. Like any asset enjoying global demand, fine wine is subject to the economic and political forces that shape international trade.

Legislative decisions, such as changes in taxation and import duties, can directly impact its pricing and accessibility. Trade wars, tariffs, and protectionist policies further add layers of complexity, affecting demand, market stability, and ultimately, investment returns. This article explores how these trade factors influence the fine wine investment market and what investors need to consider.

How trade wars affect wine demand and pricing

Trade wars often involve the imposition of tariffs or import duties on goods traded between countries, which can create a ripple effect across industries and markets. When tariffs are imposed on wine, they can create price volatility, limit access to certain markets, and reduce liquidity, which can impact the investment performance of the affected wines and regions.

For example, in the ongoing trade tensions between the United States and the European Union, wine has frequently been a target for tariffs. In 2019, the USA imposed a 25% tariff on certain European wines in response to a dispute over aircraft subsidies. This tariff included wines under 14% alcohol, impacting popular wine-producing regions such as France, Spain, and Germany, but excluded Champagne and Italy. As a result, Champagne and Italy took an increased market share in the US; when the tariffs were lifted, Bordeaux and Burgundy enjoyed an immediate uptick.

Market impact of the 2019 US tariffs on European wine: In 2019, Bordeaux accounted for 48% of the US fine wine market on average, according to Liv-ex. From October 2019 to the end of 2020, Bordeaux’s average share of US buying fell to 33%. Burgundy’s share also declined – from 13% before the tariffs to 8%. Conversely, demand for regions exempt from the tariffs rose significantly during this time. Champagne rose from 10% to 14%, Italy from 18% to 25% and the Rest of the World from 4% to 10%. Regions exempt from the 25% US tariffs also saw the biggest price appreciation in 2020. For the first time on an annual basis, Champagne outperformed all other fine wine regions. This led to its global surge.

Market impact of the 2020 Chinese tariffs on Australian wine: In 2020, China imposed tariffs on Australian wine amid a series of blows to Australian exports, which had a profound impact on Australia’s budding secondary market. Since the tariff introduction, prices for some of the top wines dipped, creating pockets of opportunity. For instance, the average price of Henschke Hill of Grace fell 4%, while Penfolds Bin 707 went down 9%. Since the tariff suspension earlier this year, Australian wine is coming back into the spotlight.

When it comes to pricing, tariffs can drive up the end cost of imported wine, particularly impacting markets where fine wine demand is driven by consumers with limited domestic alternatives. When tariffs make imported wines prohibitively expensive, consumers may turn to other regions or domestic products.

From an investment perspective, the unpredictability of trade policies requires a strategic approach that accounts for potential regulatory changes in key markets.

Strategic wine hubs in tariff-influenced markets

In response to tariffs, some regions have positioned themselves as strategic wine trading hubs by offering tariff-free or reduced-tariff environments for wine trade. Hong Kong, for example, abolished its wine import duty in 2008, aiming to become the “wine trading hub” of East Asia.

This decision has proven instrumental for the fine wine market in Asia, as investors from mainland China and other countries can access European wines without the additional costs that would apply if purchased domestically. As a result, Hong Kong has emerged as a leading location for wine auctions and a key destination for collectors and investors in Asia.

The role of trade agreements

For regions with established wine industries, trade agreements and economic alliances play a significant role in shaping wine tariffs and market access. The European Union, for instance, has trade agreements with multiple countries, allowing for reduced tariffs on wines imported from places like Australia and Chile. However, Brexit has introduced new complexities, as the United Kingdom – one of the largest fine wine markets – now operates independently from the EU.

For investors navigating the fine wine market amid trade wars and tariffs, diversification and strategic storage are essential. Diversifying across different wine regions and vintages can help minimize exposure to trade barriers affecting specific countries.

Additionally, storing wine in bonded warehouses can mitigate the risk of sudden tariff impositions on wine imports, preserving the asset’s value. Monitoring geopolitical developments is also crucial, as policy shifts can happen quickly and have immediate effects on wine prices.

While trade wars and tariffs present complexities, they also create opportunities in the fine wine investment market. In a politically charged landscape, understanding the influence of trade policies on wine markets is critical. By staying agile and responsive to policy changes, investors can better navigate the complexities of wine investment in a globalised yet fragmented market.

Want to learn more about fine wine investment? Download our free guide.

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