The wine market has improved – Kommersant FM

Investments in luxury wine and champagne are no longer popular. Due to the increase in rates by the world’s central banks, the profitability of such assets is almost equal to deposits, writes the Financial Times. According to the Burgundy 150 Index, the price of Burgundy wine has fallen by almost 16% in 2023. Elite vintage sparkling wine fell in price by 17%, and wines from the Rhone Valley in France – by 19%. This is the first time in three years that such a decline has occurred in the luxury wine market. Among the reasons, experts, among other things, cite weak interest from buyers from Asian countries.

But the situation does not look like a crisis, says Leonid Rafailov, general director of AST, who imports wines: “By the end of 2023, prices for many premium wines are really starting to decline. However, over the past three years they have grown at a galloping pace, exceeding 30-40% every year. Accordingly, our exchange colleagues call the decline that we are now seeing a correction. The price is adjusted, and that’s normal.

The market expected continued strong demand in Asia, especially China. But after the restrictions were lifted, the Chinese market does not show the same level of demand. This is precisely because prices for premium wines have increased very much over the past three years.

The cost of many wines, sparkling and still, will continue to decline at the beginning of 2024. However, by the middle of next year we will see equilibrium, when effective demand meets the correct market price.”

According to the Financial Times, from 2020 to 2022, wine prices increased by 39%. The active growth of investments in elite alcohol in recent years was caused, among other things, by the fact that other markets showed negative dynamics.

In addition, climate disasters have led to a shortage of wines from the best vintages, causing shortages and excessive demand. However, the demand for elite brands will always be high, and, therefore, the price will soon begin to rise, explains member of the Russian Sommelier Association Andrei Zotov: “Two categories that are growing, no matter what, are Champagne and Burgundy. These are the final points of any winephile who develops his taste, and sooner or later comes to wines from Burgundy. It’s the same with Champagne.

Considering that the general interest in wine is still growing, the number of people wishing to join the great wine is also increasing. Statistics on price changes for Champagne will still play out, now this is a good way to enter at a low cost.

A very healthy and interesting trend is that due to the entire history of sanctions, the Russian market has been cleared of large players who occupied the lion’s share of it. Very interesting champagnes have appeared from small houses that did not exist before. The range of manufacturers has also expanded. Less well-known champagnes, but often not inferior in quality, aroma and taste, arrived. This allows us to dive a little deeper into the world of Champagne. A trend towards switching to niche, small producers has emerged in the world, but in our case this happened due to circumstances.”

In Russia, foreign alcohol, on the contrary, has risen in price in 2023 due to sanctions. The prices for sparkling wines and French cognac, as well as Scotch and Irish whiskey increased the most – by almost 40%.

---

Everything is clear with us – Telegram channel “Kommersant FM”.

Ulyana Gorelova