The Wine Market Sobers Up

Asia_Wine.jpg

These are lush years for luxury industries, like $5,000 handbags and pricey art. But one billionaire friendly market appears to have lost its legs: fine wine. That could be a sign of trouble for all of us, even you've never paid more than $9.99 for a bottle of Cabernet.

Auction prices for high-end wines have taken a 23 percent dip since peaking a year ago, according to the Liv-ex Fine Wine 100 Index, which tracks a collection of the the world's most sought after bottles. The market had previously been on a tear, rising 264 percent since December 2003. And according to today's Wall Street Journal, recent pre-sales from top vineyards have been noticeably weak. 

Expensive wines and other luxury goods are a barometer for the health of the global elite. Given that those 1 percenters have been the main beneficiaries of recent economic growth, a pullback in their spending could signal a wider contraction.   

So are the wine market's troubles yet another sign of a foundering world economy? Possibly. 

Much of the fine wine market's recent growth has been driven by China, where overall wine consumption has more than doubled since 2005, making it the globe's fifth largest consumer by some estimates. Expensive Bordeaux has become one of the ultimate status symbols among the country's newly wealthy business and political leaders, which has helped transform Hong Kong into one of the capitals of the wine trade and driven the cost of prized brands, such as Cheateau Lafite Rothschild, as high as high $100,000, according to Reuters. The recent slackening of prices could be yet another informal sign that China's growth engine is cooling down, which would in turn depress the global economy.  

Thankfully, the wine market's sour turn could also just be a sign of changing tastes. Eighty-six of the 100 bottles Liv-ex tracks are Bordeaux, the traditional king of fine wine. But as the Financial Times wrote in May, recent auctions suggest that Hong Kong buyers, perhaps spurred by the rampant counterfeiting of top Bordeaux, are branching out to wines from other regions, especially Burgundy labels such as Domaine de la Romanee-Conti. As ArtInfo succinctly put it, "Lafite is out, Conti is in." 

In any event, it's one more lesson: As goes China, so goes the markets. Including those for ludicrously expensive French wine. 

Presented by

Jordan Weissmann is a senior associate editor at The Atlantic.

How to Cook Spaghetti Squash (and Why)

Cooking for yourself is one of the surest ways to eat well. Bestselling author Mark Bittman teaches James Hamblin the recipe that everyone is Googling.

Join the Discussion

After you comment, click Post. If you’re not already logged in you will be asked to log in or register.

blog comments powered by Disqus

Video

How to Cook Spaghetti Squash (and Why)

Cooking for yourself is one of the surest ways to eat well.

Video

Before Tinder, a Tree

Looking for your soulmate? Write a letter to the "Bridegroom's Oak" in Germany.

Video

The Health Benefits of Going Outside

People spend too much time indoors. One solution: ecotherapy.

Video

Where High Tech Meets the 1950s

Why did Green Bank, West Virginia, ban wireless signals? For science.

Video

Yes, Quidditch Is Real

How J.K. Rowling's magical sport spread from Hogwarts to college campuses

Video

Would You Live in a Treehouse?

A treehouse can be an ideal office space, vacation rental, and way of reconnecting with your youth.

More in Business

Just In