Volatile first quarter for fine wine, but there is optimism on the horizon

The first quarter of 2025 has seen volatility on the back of unsettled markets and geopolitical tension, however demand for fine wine is expected to rise in 2025, according to Wine Cap's latest report, which may prove a surprising ray of optimism. Fine wine has proved not to be  immune from the significant headwinds on global markets caused by the re-escalation of global trade tensions due to Trump's tariffs, the report noted - and the coming months "will be pivotal, with trade developments likely to dictate sentiment and demand in key markets". The effect has been marked on mainstream markets - for example the S&P500 has fallen 7.2% while the Nikkei 225 is down 225%  - and fine wine also felt the pressure. The Liv-ex 1000, which provides the broadest measure of the market, fell 2.1% in the first quarter, with Bordeaux and Burgundy particular weak, down 2.9%. This puts additional pressure on the spring en primeur campaign, in which confidence is "already eroding", the report said. "This year's campaign faces a delicate balancing act: justify pricing and broader market weakness, or risk alienating already cautious buyers." However, in spite of this gloomy picture, trade activity "is rising" in terms of value and volume traded. There were also notable breadth of choice and new names on La Place's Hors Bordeaux release, including Latour 2016 - a reminder of Bordeaux's "enduring ability to dominate the conversation when it choses to" even as the spring beyond Bordeaux campaign continues to broaden. Furthermore "confidence in fine wine as a long-term investment continues to strengthen", Wine Cap said, pointing to its recent wealth report, which found that 96% of UK wealth managers expect demand for fine wine to increase in 2025, compared to 94% in art, and 28% in rare whisky. "As macroeconomic uncertainty continues to rattle equities and bonds, fine wine’s stability and resilience are drawing renewed attention from high-net-worth individuals and wealth advisors," it said. As  a result, despite the "continued price sensitivity" and ongoing "recalibration" in the market, the second quarter "may offer the first signs of recovery if the right tone is struck", on the back of renewed interest from "investors who see current levels as a buying opportunity."