London International Vintners Exchange

London International Vintners Exchange (Liv-ex) is an exchange for investment-grade wine based in London.[1] Liv-ex, which was founded in 1999, provides a marketplace where wine merchants are able to trade wine, and also publishes two wine price indices based on these transactions which are widely used to gauge general price developments for the "fine wine" market in general.[2]

Trading on Liv-ex

The wines typically traded on Liv-ex are collectible or investment grade "fine wine" that have a significant trading volume on the second-hand market, and these wines are traded by the case. This largely means a number of high-end French wines of highly rated vintages, mainly recent vintages and vintages in early maturity. In difference from wine auctions, private collectors can not trade directly on Liv-ex, and older vintages or otherwise very rare collectible wines are not traded.

In 2010, trading on Liv-ex received attention and some criticism for allowing actors to short sell en primeur Bordeaux wines before they had been released by the producers and given an initial ex-château price. Château Lafite-Rothschild 2009 was the first wine where such trades were made. Liv-ex defended the practice by mentioning that this type of trade is standard on other asset markets.[3]

Liv-ex Fine Wine Indices

Liv-ex publishes five different wine indices. The prices that are used to compute the index are wines in bond in London, priced in Pound sterling. In their construction these indices are similar to a stock market index. The composition of the index is regularly updated as wines are added and removed from the index, and their index weight revised.

Liv-ex Fine Wine 50 Index

The Liv-ex Fine Wine 50 Index[4] tracks the daily price movement of the most heavily traded commodities in the fine wine market - the Bordeaux First Growths. It includes only the ten most recent vintages (excluding futures, currently 2000-2009), with no other qualifying criteria applied.

Liv-ex Fine Wine 100 Index

The Liv-ex Fine Wine 100 Index represents the price movement of 100 of the most sought-after fine wines for which there is a strong secondary market and is calculated monthly.[5] While the majority of the index is composed of Bordeaux wines the Liv-ex Fine Wine 100 Index includes other French appellations, such as Burgundy and Champagne, as well as other important international wines, such as Penfolds Grange. [6]

Liv-ex Claret Chip Index

The Liv-ex Claret Chip Index tracks the top-scoring Bordeaux First Growth the — "blue chips" of the fine wine world. It includes all the First Growths from the last 15 years that have scored 95 points and above from Robert Parker. It is calculated weekly.

Liv-ex Fine Wine Investables Index

The Liv-ex Fine Wine Investables Index tracks the most "investable" wines in the market — around 200 wines from 24 top Bordeaux chateaux. In essence, it aims to mirror the performance of a typical wine investment portfolio. The index data starts in 1988, further back than any other Liv-ex index.

Liv-ex Fine Wine 500 Index

The Liv-ex Fine Wine 500 Index has the broadest base of all the Liv-ex indices and is designed to reflect price trends in the wider fine wine market. The majority of the index consists of Bordeaux wines, although it also includes wines from Burgundy the Rhone, Champagne, Port, Italy and the New World.

Vine

Vine is a specialist warehouse and freight-forwarding service offered by Liv-ex. Services include condition checks and verification, stock consolidation and escrow, labelling and export documentation, and various storage and transport options. Vine has an online information system to track orders, create reports and view photos.

Cellar Watch

Cellar Watch is a cellar-tracking/price-search tool provided by Liv-ex. It allows wine collectors to search for current and historic prices, monitor the value of their wine cellars, and analyse market movements.

L-WIN

The Liv-ex Wine Identification Number (L-WIN) is a system introduced by Liv-ex in mid-2011 as an attempt to standardise the wine trade.[7] The 7-digit number serves as a universal wine identifier and removes confusion caused by different vendors' naming conventions.

Bordeaux classification

In 2009 Liv-ex has updated the Bordeaux Wine Official Classification of 1855, emulating the original method while using modern price averages from the last five vintages (2003-2007). The list was assembled applying Médoc and Pessac-Leognan wines with a minimum production of 2000 cases, disregarding any second wines that would qualify.[8]

References

  1. ↑ Liv-ex: About Liv-Ex, accessed 12 December 2008
  2. ↑ Stimpfig, John, Decanter.com (December 4, 2008). "Fine wine prices continue decline".
  3. ↑ Lechmere, Adam, Decanter.com (June 1, 2010). "Liv-ex Lafite 09 trade causes outrage and acceptance".
  4. ↑ Liv-ex: Fine Wine 50 Index, accessed 19/09/2011
  5. ↑ "Liv-ex Fine Wine 100". Liv-ex. Liv-ex. Retrieved 8 January 2015.
  6. ↑ "Liv-ex Fine Wine 100 falls 0.03% in December". Liv-ex. Liv-ex. Retrieved 8 January 2015.
  7. ↑ "Liv-Ex launches universal wine ID system". Harpers. 15 June 2011.
  8. ↑ Liv-ex: Bordeaux Classification, accessed 19/09/2011

External links

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