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Californian wine prices rise in Sterling but fall in Dollar terms in 2022

Recent trading activity

Burgundy continued to ride high in the secondary market after the region’s trade share broke a new record last week. This weekend, the spotlight fell on Domaine de la Romanée-Conti, Domaine Armand Rousseau, Domaine Méo-Camuzet and Domaine Bizot.

Demand for Tuscany also picked up. Sassicaia 2019 and various Masseto vintages, including 2007, 2018 and 2014, were at the forefront of activity. The latter last traded at an all-time high of £7,400 per 12×75, up 76.2% on its release price.

Bordeaux trade was led by Château Lafite Rothschild 2018, Château Margaux 2000 and Château d’Yquem 2019.

Asian buyers were the most active this weekend, particularly when it came to Burgundy. Our recent report, ‘The fine wine market in Asia-Pacific’, explored some of their long-term purchasing patterns.

Dollar strength impacts the price of Californian wine

The US dollar has strengthened over the course of the year, as the Federal Reserve increased interest rates to combat rising inflation. Year-to-date, the US Dollar index, which tracks its performance against a basket of other currencies, is up more than 17%.

The strength of the currency has meant that American wines have become more expensive for many non-domestic buyers. As measured by the wines in the California 50 index, prices are up 8.2% YTD when priced in Sterling, but when priced in US Dollars they are down by the same amount.

This currency swing has already had an impact on the USA’s trade share, which has fallen from a record 7.6% in 2021 to 6.1% so far this year – though buyers have also been heavily focused on other regions this year such as Champagne.

Nonetheless, as the chart above shows, the California 50 index is still outperforming the industry benchmark, Liv-ex Fine Wine 100 (+7.5%), and the Bordeaux 500 index (+6.1%).

Moreover, all of the index’s component wines have delivered positive returns. The best-performer is Harlan Estate, up 14.1%, followed by Opus One (13.1%).

Screaming Eagle, which was the main driver behind California’s success last year, has risen the least in 2022, up 5.8%. However, it has continued to be the most traded Californian wine, with demand centred around its Cabernet Sauvignon 2019 and Sauvignon Blanc 2018.

Although a strong Dollar means US wines are currently at a premium when priced in Sterling, for buyers using US Dollars or Dollar-linked currencies, prices of these high value wines will be looking more competitive. On the other hand, sellers in other currencies like Sterling can also benefit from the rising prices of Californian wine, which allow them to achieve higher margins.

There are currently over 700 LIVE opportunities from Californian wines on the exchange.

California opportunities

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 600 merchant members from across the globe. Together they represent the largest pool of liquidity in the world – currently £80m of bids and offers across 16,000 wines. 

Independent data, direct from the market.