Is the fine wine market finally bottoming out?

The fine wine market is showing early signs of recovery after a prolonged downturn, according to a recent webinar hosted by Liv-ex, the global exchange for fine wine data and trading. The session, titled “Is Recovery in Sight?”, was led by Sophia Gilmour and Henry Johnson, who provided an in-depth look at the challenges and potential turning points facing the industry in 2025.

The fine wine sector has been in its third year of correction, marking the longest such period in two decades. The Liv-ex 100 index, a key benchmark for the market, has dropped 27% from its peak and is down 5% so far this year. Prices are now approaching levels last seen before the pandemic-driven boom, a psychological threshold for many investors and collectors.

The roots of the current situation trace back to 2020, when low interest rates and increased wealth creation drove a surge in demand for alternative assets like fine wine. This momentum proved unsustainable. By late 2021, rising interest rates and economic headwinds triggered a withdrawal of capital, leading to falling prices from March 2022 onward.

The start of 2025 brought a brief period of optimism. The first quarter saw record numbers of active participants and transaction volumes. However, this positive trend was cut short in March by the threat of new U.S. tariffs on imported wines. The mere possibility of tariffs caused American buyers—who had accounted for 35% of total market value in 2024—to pull back sharply. This sudden exit echoed the withdrawal of Asian buyers in the late 2000s and led to some of the steepest price drops since the correction began. The Champagne 50 index, heavily supported by U.S. demand, was hit particularly hard.

Another blow came from the Bordeaux 2024 En Primeur campaign. Hopes that it would restore confidence were dashed as producers resisted lowering prices despite economic pressures, while collectors, wary after years of declining values, held back. Iconic wines like Lafite and Mouton remained unsold months after release—an unthinkable scenario a decade ago. The campaign’s failure further eroded trust and exposed supply chain strains.

During the typically quiet summer months, prices reached levels that began to attract buyers again. A notable development was the return of private buyers from Hong Kong, focusing on high-end Burgundy and California Cabernet Sauvignon. This renewed interest was driven by lower interest rates, favorable prices, and a stronger economic outlook in Asia. The likely catalyst was the depletion of excess inventory built up over six years, prompting merchants to restock ahead of the holiday season. While mainland China remains largely absent from the market, this activity is seen as an important sign of stabilization.

Market analysts are now watching several key indicators for evidence of a broader recovery. The bid:offer ratio—a measure of buyer confidence—has improved significantly. Last week, the Liv-ex 100 bid:offer ratio reached 0.7, its highest point since April 2023. While the overall Liv-ex 1000 ratio remains below the threshold that predicts gains, it has risen from 0.24 in June to 0.39 in September, signaling improving sentiment.

Transaction prices are also moving closer to market prices, suggesting buyers see value at current levels and are less inclined to demand steep discounts. For example, Bordeaux 2021 vintages, initially poorly received, have seen their average transaction discount shrink from -8.5% to -3.9% over the past quarter. In mature wines like Cheval Blanc 2000, deals struck near market price have helped lift asking prices for other sellers.

Technical analysis shows that most Liv-ex indices are approaching their 2020 lows, which serve as important psychological and technical support levels. Volatility has also decreased, indicating that buyers and sellers are finding common ground on value. However, Bordeaux faces deeper structural issues, with its Bordeaux 500 index falling below 2020 levels and nearing those last seen in 2015.

The broader economic context remains crucial. Global wealth creation continues, with stock markets at record highs and a massive intergenerational transfer of wealth underway. Yet, this wealth is concentrated among fewer individuals, limiting overall demand. There is also a demographic challenge: younger generations are drinking less wine, often due to affordability concerns.

Lower interest rates are seen as the most important potential catalyst for a sustained recovery. Historically, periods of low rates have boosted demand for alternative assets like fine wine. While internal market indicators are improving, a full recovery will depend on both restored confidence within the sector and supportive external economic conditions.

Industry leaders agree that transparency and better communication are essential for rebuilding trust and attracting new buyers. The next generation of collectors expects clear pricing and honest dialogue about market challenges. Traditional sales tactics based on prestige alone are no longer effective.

The consensus among experts is that while a rapid bull market is unlikely, the worst of the correction may be over. The market is expected to move sideways or stabilize for some time, allowing new buyers to enter at attractive prices and giving the sector time to rebuild confidence. For long-term growth, producers, distributors, and merchants must adapt to changing consumer values and invest in engaging younger demographics.

The fine wine market’s resilience is being tested, but early signs suggest that with adaptation and renewed focus on transparency, it can emerge stronger and more sustainable in the years ahead.