Speculative Money Dumps Vintage Champagne Bottles As 'Bubble In Bubbly Pops'

Sentiment around the luxury market quickly turned negative in the second half of this year as elevated inflation, high interest rates, and a slowdown in the economy pinched consumers. 

In May, we first asked this question: Did Europe's Luxury Bubble Just Burst? 

By June, we pointed out Luxury Recession: Diamond Prices Crash, Rolex Downturn Persists. 

In October, we said: First Rolexes, Then Diamonds, Now Consumers Revolt Against Mercedes S-Class As Luxury Bust Worsens and 'It Ain't Gucci': LVMH Shares Tumble As Luxury Bubble Unravels. 

Then last month, noted: Luxury Bust Worsens: Rolex, Patek Prices Hit Two-Year Lows. 

Within the deflating luxury bubble, we now focus on the fine vintage champagne market that has popped. 

Financial Times cites new data from online wine marketplace Liv-ex that shows the Liv-ex Champagne 50 price index, which nearly doubled during Covid, has moved well off its high since the Federal Reserve embarked on the most aggressive interest rate hiking cycle in a generation. 

"Speculative money came into the market, buying multiple cases when they really needed only one or two," said Justin Gibb at Liv-ex.

Just like speculative money has dumped Rolexes, Gibb noted, "They're now selling these excess cases."

Champagnes with the largest price gains during the Covid mania have retraced the hardest. 

According to merchants, speculators who stockpiled cases of 2012 Roederer Cristal or 2004 Krug have been hit by a hangover this year, losing more than a fifth in price so far.  

Much of the fizz is coming out of the fine vintage champagne, as well as fine wine, according to other Liv-ex indexes:

As for the champagne market as a whole, the United States and the UK are the top importers in the world, accounting for 33.7 and 28.1 million 750 milliliter bottles in 2022, respectively.

The downturn in luxury might impact champagne sales this holiday season.