May 2020 Newsletter

Hello All,

I hope you are well and finding plenty to keep you occupied during the lockdown.

We remain in ‘business as usual’ mode during these challenging times, with the business still fully operating, albeit with all our staff working safely from home.

Operating as normal

We’re grateful to be able to operate as normal during such a difficult time for UK businesses – fine wine continues to hold its own while other more traditional areas are struggling. Being one of only a handful of assets that appear to weather the storm triggered by COVID-19, we have seen our investment sales increase over the past 3 months as new investors are attracted to fine wine as an alternative investment, and will likely continue to in the weeks and months to come.

A safe haven during global uncertainty

Recent statistics from the ‘S&P Global Luxury Index’, which tracks 80% of the largest publicly traded luxury goods companies, show a 24% decline due to the impact of COVID-19 on sales. In spite of this, trading prices of popular investment grade wines continue to hold their own, with the Liv-ex Fine Wine 1000 falling only 4% (between January 1st and March 31st). This reflects the trend which occurred during the last financial crisis – the resilience of fine wine consistently makes it a safe haven in times of global market uncertainty.

En Primeur delays

One thing that hasn’t happened this year, of course, is the annual En Primeur tastings in Bordeaux, usually carried out in April. With critics unable to taste the wines and thus assign their scores, which impact significantly on their prices, the wines will be released later than usual. So, while there may be significant demand for the 2019 vintage, it will not be immediate. Early indicators are that 2019 is a good vintage, although not a great vintage, with critics like Jane Anson expressing cautious optimism.

Record alcohol sales

Wine retailers have enjoyed a substantial demand, with UK alcohol sales hitting £356.5m in the week that lockdown was announced (statistic from Nielsen). Although the statistics indicate that there is a bias towards cheaper, everyday drinking wines than classics.

However, we can’t help wondering how many bottles of fine and rare wine have also been consumed during lockdown, pushing the prices up for the bottles that remain – time will tell.

We wish you all the best for now, please feel free to get in touch if you have any questions or would like to discuss your portfolio with us.

Take care and stay safe,

The Elite Wine & Whisky Team

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