A year to forget ends with the fine-wine trade embarking on the slow road to recovery
The World of Fine Wine’s auctions and secondary market correspondent,
Chloe Ashton, finds cause for cautious optimism after the first 12 difficult months of Covid-19
Against a frightening global backdrop, fine-wine prices managed to climb in 2020. While an uphill struggle logistically, with merchants navigating digital adaptation as well as licking old wounds (Brexit uncertainty, US tariffs, Hong Kong’s political instability), heightened interest and activity from collectors propped up the market, finally ending an historic year with positive gains.
Liv-ex indices show that the market did stumble at the initial, global impact of Covid-19—the Liv-ex 50, comprising Bordeaux first growths, dropped 3 percent in the first quarter of the year (fig.1). “Fear began to set in as sales for Chinese New Year were drastically down on previous years,” explains Justin Gibbs, Co-founder and Director of Liv-ex. On-trade activity notwithstanding, this panic was thankfully short-lived, at least for anyone with a decent customer base in Hong Kong. As Asia started to recover from the worst of Covid, the balance tipped the opposite way in Europe and the US. Business halted temporarily on home ground, and the ensuing weakness of the pound did much to boost sales in Hong Kong after its quiet first two months of the year. “We had enormous sales to Asia at the start of lockdown 1 when the GBP briefly dropped to its lowest level in years against the HKD,” explains Stephen Browett, Chairman of Farr Vintners. Though Covid cases in America hit their first peak at the same time as Europe, Browett notes that “sales to USA were hit more by tariffs than exchange rates.”