Fine wine market faces mixed prospects as bid:offer ratios decline

The fine wine market is facing a challenging period as it looks towards 2025. According to Liv-ex, a platform for wine trade, the market is experiencing mixed prospects due to ongoing demand-supply imbalances. The bid:offer ratio, which measures the total value of bids and offers, is a key indicator of market trends. Historically, a drop in this ratio has signaled bearish trends, while an increase suggests a bullish reversal. In early 2024, the ratio hit new lows but showed slight recovery by the year's end, hinting at a potential upward trend. However, it remains below the 0.5 threshold, which is considered a sign of price stability.

Since December, the bid:offer ratios for major Liv-ex indices, including the Fine Wine 50, 100, and 1000, as well as the Bordeaux 500, have declined. Most sub-indices have also been affected. The Italy 100 index showed resilience, with its ratio rising to 0.65, the highest in the past year. The Burgundy 150 saw a minor increase but stayed low at 0.18. All other indices are below 0.50.

Masseto leads the Italy 100 wines with the highest bid:offer ratio, increasing from 1.05 in August to 1.71 recently. Prices for Masseto have risen, with seven out of ten vintages seeing price increases. Only 20 wines in the Italy 100 have increased over the past year, six of which are Masseto. Ornellaia's ratio rose from 0.45 in November to 0.83 in December and remains stable at 0.79. If demand stays strong, Ornellaia's prices may stabilize.

The Sauternes 50 has the lowest bid:offer ratio at 0.05, reflecting a shift away from sweet wines. Even Château d’Yquem, a top Sauternes, has a low ratio of 0.10. The Rest of the World 60 follows with a ratio of 0.16, despite some wines maintaining stable demand. Within this index, Vega Sicilia Unico and Opus One have ratios of 0.59 and 0.47, respectively. However, Screaming Eagle Oakville Cabernet Sauvignon, Seña, and Dominus have very low ratios of 0.04, 0.05, and 0.06. Penfolds Grange is slightly better at 0.10.

The Fine Wine 50, Second Wine 50, and Bordeaux Legends 40 have seen significant drops in their ratios over the past year, each by over 0.43. This indicates that even top Bordeaux vintages are struggling with demand-supply issues. With over 20,000 cases produced annually and stockholders unwilling to sell below cost, offer prices have not decreased enough to boost demand.