A couple of weeks ago Forbes
published its annual rich list. The list shows that the number of billionaires
has risen from 1,226 in 2012 to 1,426 in 2013 – an increase of 16%.
In the past we have noted the correlation between the number
of billionaires and the Liv-ex Fine Wine 100 Index, with demand for fine wines – and other alternative
assets – closely linked to wealth creation. Yet in 2012 we noticed this
correlation slipping, and in the last year the gap between the two has widened
further: the number of billionaires has continued to rise despite the fine wine
market’s downturn. This can be seen from the chart below, which tracks Forbes
data against the Liv-ex 100. (We have converted the Liv-ex Fine Wine 100 Index to
dollars to remove the effects of currency movements.)
With China one of the biggest drivers of the fine wine
market, we took a look at the number of Chinese billionaires over time. Once
again, the correlation that we have previously seen has weakened. Despite the
rising number of Chinese billionaires – up 28% on 2012 – wine prices have fallen.
Perhaps unsurprisingly, it would seem that billionaires cannot sustain the wine
market alone.
