- A strong Sterling made fine wine more expensive for buyers in different currencies in 2021 – but this did not slow secondary market trade.
- HK and US Dollar buyers enjoyed the best exchange rate in relation to the First Growths.
- Prices of wines in the Liv-ex 100 index remained much more favourable for buyers in non-Sterling currencies throughout 2021.
Last year proved to be a hugely successful year for the secondary fine wine market. As detailed in our 2021 report, leading indices such as the Liv-ex Fine Wine 100 and Fine Wine 1000 hit record highs more than once.
The growing strength of Sterling at the end of 2020 caused some questions about the potential momentum of secondary market going into 2021. In the end, however, it had little impact on demand for the world’s top labels.
The chart above shows the Fine Wine 50 (measured in Sterling) and its value in different currencies, in turn showing the relative buying power of each based on changing exchange rates.
As can be seen, the strength of Sterling made First Growth prices more expensive in different currencies for most of the year – good news for stockholders but less welcome for new buyers.
However, US and Hong Kong Dollar buyers had a more favourable exchange rate, especially in the second half of the year.
Indeed, some of the Fine Wine 50’s strongest month-on-month rises coincide with a stronger Dollar:Sterling exchange in the last three-to-four months of 2021.
Broader markets mean more opportunities
However, when looking at a slightly broader market, a different picture emerges. The component wines of the Liv-ex 100 index, for example, includes labels from Champagne and Italy, which have more accessible prices than the First Growths.
Buyers in other currencies were still able to find relative value within these regions due to the low entry points of their wines. The resulting demand then led to rising prices and as a result, these broader markets performed best in 2021.
For example, the Liv-ex 100 index rose 23.0% and the Liv-ex 1000 was up 19.1%, compared to just 13.2% for the Liv-ex 50.
Liv-ex members can view markets on the exchange in different currencies by clicking on settings.
Liv-ex analysis is drawn from the world’s most comprehensive database of fine wine prices. The data reflects the real time activity of Liv-ex’s 560+ merchant members from across the globe. Together they represent the largest pool of liquidity in the world – currently £100m of bids and offers across 16,000 wines. Independent data, direct from the market.
