Wine Sales Slow

Bloomberg is reporting collector wine sales are starting to slow.  Sales are still strong, and there is still overall growth in the market, but the pace of that growth is showing signs of slowing.  To me, that is not too surprising as the growth in wine sales, especially to Asia has been exceedingly robust and the pace could not continue. According to the article wine sales grew by an amazing 75% in 2010 but only 14% for the past year.

Bloomberg reports on current wine trends

Growth in wine sales by the leading five auction houses slowed to about 14 percent this year from 75 percent in 2010 as the global financial crisis cooled demand for Chateau Lafite-Rothschild and other top Bordeaux producers.

Sales by Acker Merrall & Condit, Christie’s International, Sotheby’s (BID), Zachys and Hart Davis Hart Wine Co. still achieved a record of about $405 million this year, helped by a late flurry of activity this month, according to data compiled by Bloomberg News. That total compares with $353.7 million in 2010.

While Hong Kong accounts for half of the global auction market, buoyed by Chinese appetite for top Bordeaux and rare Burgundies, expansion in the market has slowed. Asian buyers have become unwilling to pay ever-higher auction records for First Growths such as Lafite, and they also balked at Bordeaux’s ambitiously priced 2010 “en primeur” campaign. The benchmark Liv-ex 100 Fine Wine Index is down 11.4 percent this year.

“It feels a lot more than that,” Simon Staples, the Hong Kong-based head of sales and marketing at London wine broker Berry Bros & Rudd said in an interview. “Prices for some First Growths such as Lafite ’08 have dropped off by more than 40 percent and haven’t reached the bottom yet. Our clients are looking instead at Bordeaux Second Growths and the top 10 names in Burgundy.”

Prices for Lafite, which soared to bubble levels for some vintages in the past two years as Chinese demand propelled bids higher, showed signs of peaking in the final quarter of 2010.

Source: Bloomberg, click HERE to read the full article.