Since the year 2000, the London International Vintners Exchange has been tracking sales data from merchants and investors to create indices for the fine wine market. Over 400 merchants and traders in 36 countries participate in governing and enforcing the rules of the Liv-Ex exchange.
James Miles is the co-founder, managing director, and chairman of Liv-Ex, the wine trading and data platform, whose aim was to increase transparency to the fine wine market. Liv-ex represents the “largest pool of professional fine wine buyers and sellers globally,” along with the “world’s most comprehensive database of fine wine prices.”
Creating price indexes has been a crucial component of the increasing transparency and liquidity for fine wine collecting and investing. Liv-Ex price indexes are heavily relied upon for measuring activity and performance across the industry.
Over three million historical data points are compiled to produce a weekly and monthly report reflecting the current state of the market. Along with the report, price points for important investment-grade wines are updated to reflect real-time supply and demand.
Fine Wine 100
There are four essential indexes Liv-Ex publishes but one of the most heavily referenced is the Fine Wine 100. Some call it the industry benchmark. Others would say that’s going a bit too far. Critics argue the index distorts the market by excluding some important wines that don’t necessarily trade frequently. Another critique of the index is that it’s imbalanced because it includes multiple wines from the same year. “On-vintage” years can have a heavy weighting in the index where “off-vintage” years are not included but actually performing better at a given time.
Over the last few decades, fine wine values have soared. Although not a perfect index for valuing every fine wine, the Liv-Ex price indexes have attempted to increase transparency so investors and collectors can make more informed decisions about their wine purchases.