A short plane ride from the vine-covered plains of Bordeaux lies the vital center of fine wine trading: London. Bordeaux may be the winemaking industry’s capital, but if you’re an investor seeking the best opportunities to profit from fine wine, it’s London you need to keep your eye on.
London is the powerhouse of the market. It’s home to world-class auction houses Christies and Sotheby’s, and scores of wine merchants trading on a global scale. Internationally renowned wine authors and critics like Jancis Robinson and Hugh Johnson influence drinkers the world over from their bases in or around the UK’s capital city. The UK fine wine commodity market is quite simply the largest and most developed there is—the legacy of a centuries-old British passion for Bordeaux red.
A major draw for wine traders is the London International Vintners’ Exchange—or ‘Liv-ex’, as it’s better known. Liv-ex offers established wine merchants an online trading platform, from which they can reach an immense pool of professional buyers and sellers from all corners of the globe. Former bankers Justin Gibbs and James Miles founded the exchange in 1999. From its modest beginnings, hidden away in a rented office above a takeaway pizza joint, Gibbs and Miles have grown Liv-ex to a global membership of more than 400 trading professionals in 33 countries. Collectively, these members are thought to be responsible for a colossal 80 percent of the world’s fine wine turnover.
Liv-ex is also responsible for the Fine Wine 100 index—the wine investment industry’s leading price benchmark. LVX 100 works in a similar way to the DJ30. Calculated monthly, it represents the price movement of 100 of the most sought-after wines on the market.
As a private investor, you may not be in a position to buy wines at Liv-ex’s wholesale prices, but you can still make good use of their comprehensive online database. If you want to know how much you’d stand to make by selling your wines to a wholesaler, a quick search of the Liv-ex database will give you a good indication.
Even better news for wine investors and enthusiasts is that Liv-ex has developed a handy set of online tools specifically tailored to your needs. Cellar Watch (www.cellar-watch.com) gives you professional-level access to Liv-ex data, including past and present fine wine market prices, and information on recent Liv-ex bids and transactions. The Cellar Watch Valuation Tool lets you create virtual cellars containing your wines, then monitor and analyze their real-life performance. You can divide your wines up into different cellars if, for example, you want to separate your investment wines from the ones you’ve earmarked for drinking.
Also invaluable is the famous Liv-ex blog. This is well worth following if you want to be kept up to date with all the latest happenings in the global fine wine market. The blog is an excellent resource to inform the decisions you take on your wine investments, bringing you authoritative content such as interviews with industry experts, auction reports and data summaries.
If you lack the time to digest all the latest news from Liv-ex properly, then never fear. At Westgarth we keep a constant eye on what’s happening at the exchange, so we can pass on the information that’s most relevant to your investment.Liv-ex