When a wine is traded at auction there can be huge variation
in price, as shown on the chart below (auctions are green). This is due to differences in quality: for
example the bottles may not be in their original wooden case (OWC) or there may
be damage to the labels. Consequently, potential buyers have to establish the
condition of the packaging before committing to the lot. Liv-ex trades (below in red), by
contrast, show little price variation. This is due to Liv-ex’s standardisation
of contracts: Standard In Bond (SIB) and Special.

Lynch Bages 2000

SIB stock adheres to the high standards under which fine
wine is traded amongst wholesalers. Bottles must be in their OWC, in bond, and in
. Liv-ex’s
logistics arm, Vine, has
a dedicated and specialist warehouse team that thoroughly check delivered cases
to ensure that SIB standards have been met.

The Special contract indicates that stock is not
SIB-compliant. This may be because the wine does not meet SIB packaging
standards, but a trade can be offered under a Special contract for a number of
reasons. The case may be duty paid rather than in bond, or the seller may be
looking to trade a minimum number of bottles, e.g. 25 cases of 12×75.

SIB was established to ensure that when members trade wine
they know exactly what it is they are trading. This not only creates liquidity
but also enables trades and prices to be compared like-for-like, and is one of
the reasons why Liv-ex price data is the industry benchmark. Fine wine
enthusiasts can access this data in real time through Cellar Watch – Liv-ex for collectors.