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2016 was an eventful year for the fine wine market. The Liv-ex Fine Wine 100—the industry benchmark, which tracks the price movements of 100 of the most sought-after fine wines—rose for an unprecedented thirteen consecutive months and outperformed other global indices, as shown in the chart below. It is now at its highest level in five years. The broader Liv-ex 1000 closed 2016 at a record high after gaining 22.3% over the course of the year.

After four years of decline and one year of flat lining, the Bordeaux market recovered as buyers began to perceive value in the region. The Bordeaux 500 index closed the year up 23.1%. Among the top performers were the second wines of the Bordeaux First Growths, even from weaker vintages. Petit Mouton 2013, for example, rose from $1,416 per 12x75 to $2,006 – an increase of 42%. However, the biggest star was Pape Clement 2009, which jumped 48% to $1,699. This was, in no small part, thanks to Robert Parker’s 100-point rating of the wine in his Magdalena Hedonist's Gazette article.

Currency fluctuations have played a major part in this year’s story. Following the Brexit vote, a weaker Sterling encouraged activity from Dollar and Euro-based buyers. On Liv-ex, buying from US merchants more than doubled in 2016 – and their purchases included a significant volume of high-value Bordeaux brands. As the chart below shows, the Liv-ex 100 index, which is calculated in Sterling, looks very different when viewed in other currencies. Dollar buyers in particular might continue to take advantage of prices at multi-year lows.

While Bordeaux was a key price performer in 2016, its market trade share was largely unchanged from the previous year at 73.7% by value. Burgundy took the second highest average monthly trade share with 7.9% of the market. Champagne and Italy followed close behind.

While these key regions continue to dominate market activity, trading has broadened to include an increasing number of wines. Over the last year, more than 4,000 different wines from 670 brands traded, compared to 3,000 wines from 265 brands the previous year. 2016 also saw ground-breaking first trades for English and Chinese wines when Nyetimber Classic Cuvee 2010 and Ao Yun 2013 traded in the summer.

Overall, the fine wine market appears robust: trading is both broad and active. As 2016 begins to unfold, it remains to be seen whether a year of sustained gains will continue. In the context of significant global political and economic shifts, currencies remain volatile. The influence of this is likely to continue over the next year.

Bordeaux has been the main driver behind the broader market recovery this year and early feedback suggests that 2016 will be another quality vintage. En Primeur, and the sentiment around it, will therefore be an important factor in determining the direction of the Bordeaux market in 2017.

Yet the story this year has not just been about Bordeaux. The fine wine market is broadening and other regions are holding their market shares, with an increasing number of new and different wines trading. While Bordeaux continues to offer value after the fall from its 2011 peak—particularly for Dollar buyers—there is a growing awareness that there is more to the fine wine market than the traditional high-value blue chip Bordeaux brands. 2017 looks set to be another fascinating year.

Liv-ex operates the global marketplace for fine wine. It offers trading, data and settlement services to professional buyers and sellers of fine wine. Private collectors can view Liv-ex prices and value their portfolios using Cellar Watch and find regular market analysis on the blog.