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“Italy is the star” – Fine wine market continues to broaden during Covid-19

Current trends in the fine wine market during the Covid-19 crisis are largely a continuation of the recent past. Liv-ex examined the shape of the market and the challenges facing the wine trade in a global lockdown in a members-only webinar, hosted last week. Liv-ex’s Justin Gibbs was asked how trading is changing. Here is his take on it.

The fine wine market is broader than ever. Bordeaux’s market share has been steadily falling after peaking at 96% in 2010, at the height of the China-led boom. It has since halved – so far in 2020, it stands at only 48%.

Burgundy has long been the main beneficiary of Bordeaux’s decline. The region took a record share of trade last year, reaching an annual average of 20%. In 2020 so far, this has declined to 15%. The factors behind this changing landscape were examined at length in our report, Burgundy: after the peak.

Champagne and Italy have been attracting growing attention in recent years, which we explored in our 2018 report, Champagne: a market without bubbles, and our 2019 report, The fine wines of Italy: past, present and future. The regions each accounted for 9% of trade by value in 2019, having particularly benefited from exclusion from the 25% US tariffs. Just six years ago, they stood at 2% and 3% respectively.

Another striking trend has been the rise of the Rest of the World category. So far this year, its trade share by value stands at 10%, up from an average of 5% in 2019 and 2% six years ago. RoW has been led by the USA (5.2%), Spain (1.3%), Australia (1.2%) and Germany (1.1%).

Chart 1: Regional market share year-on-year
market share

Chart 2 provides a more granular overview of recent market trends by breaking the regional trade share month on month in 2020.

In April, the number of different wines traded was 30% higher than at the beginning of the year.

As the market has continued to broaden, Bordeaux hit an all-time monthly low of 41%. Burgundy fell too, to 9.3%; a further evidence that buyers have been spreading their wings beyond these two high-value regions.

Italy was the star of the show, reaching a record high of 22.5% last month, in part driven by exemption from the US trade tariffs and the well-received Brunello ’15 and Barolo ’16 campaigns. Rhone (5.2%) and the RoW (13.3%) also saw their trade shares increase.

Chart 2: Regional market share year-to-date
market share

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