London International Vintners Exchange
Encyclopedia
London International Vintners Exchange (Liv-ex) is an exchange
for investment
-grade wine
based in London
. Liv-ex, which was founded in 1999, provides a marketplace
where wine merchant
s 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.
s of highly rated vintages, mainly recent vintages and vintages in early maturity. In difference from wine auction
s, 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 wine
s 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.
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.
First Growths. It includes only the ten most recent vintages (excluding futures, currently 1999-2008), with no other qualifying criteria applied.
, to 0.9% of white Bordeaux, to 0.3% of red Italian wine
and to 0.1% of red Rhone wine.
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.
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.
wines, although it also includes wines from Burgundy
the Rhone, Champagne, Port
, Italy and the New World.
, 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 case
s, disregarding any second wine
s that would qualify.
Exchange (organized market)
An exchange is a highly organized market where tradable securities, commodities, foreign exchange, futures, and options contracts are sold and bought.-Description:...
for investment
Investment
Investment has different meanings in finance and economics. Finance investment is putting money into something with the expectation of gain, that upon thorough analysis, has a high degree of security for the principal amount, as well as security of return, within an expected period of time...
-grade wine
Wine
Wine is an alcoholic beverage, made of fermented fruit juice, usually from grapes. The natural chemical balance of grapes lets them ferment without the addition of sugars, acids, enzymes, or other nutrients. Grape wine is produced by fermenting crushed grapes using various types of yeast. Yeast...
based in London
London
London is the capital city of :England and the :United Kingdom, the largest metropolitan area in the United Kingdom, and the largest urban zone in the European Union by most measures. Located on the River Thames, London has been a major settlement for two millennia, its history going back to its...
. Liv-ex, which was founded in 1999, provides a marketplace
Marketplace
A marketplace is the space, actual, virtual or metaphorical, in which a market operates. The term is also used in a trademark law context to denote the actual consumer environment, ie. the 'real world' in which products and services are provided and consumed.-Marketplaces and street markets:A...
where wine merchant
Merchant
A merchant is a businessperson who trades in commodities that were produced by others, in order to earn a profit.Merchants can be one of two types:# A wholesale merchant operates in the chain between producer and retail merchant...
s are able to trade wine, and also publishes two wine price indices
Index (economics)
In economics and finance, an index is a statistical measure of changes in a representative group of individual data points. These data may be derived from any number of sources, including company performance, prices, productivity, and employment. Economic indices track economic health from...
based on these transactions which are widely used to gauge general price developments for the "fine wine" market in general.
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 wineFrench wine
French wine is produced in several regions throughout France, in quantities between 50 and 60 million hectolitres per year, or 7–8 billion bottles. France has the world's second-largest total vineyard area, behind Spain, and is in the position of being the world's largest wine producer...
s of highly rated vintages, mainly recent vintages and vintages in early maturity. In difference from wine auction
Auction
An auction is a process of buying and selling goods or services by offering them up for bid, taking bids, and then selling the item to the highest bidder...
s, 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
En Primeur
En primeur or "wine futures", is a method of purchasing wines early while a vintage is still in a barrel, offering the customer the opportunity to invest in a particular wine before it is bottled. Payment is made at an early stage, a year or 18 months prior to the official release of a vintage...
Bordeaux wine
Bordeaux wine
A Bordeaux wine is any wine produced in the Bordeaux region of France. Average vintages produce over 700 million bottles of Bordeaux wine, ranging from large quantities of everyday table wine, to some of the most expensive and prestigious wines in the world...
s before they had been released by the producers and given an initial ex-château price. Château Lafite-Rothschild
Château Lafite-Rothschild
Château Lafite Rothschild is a wine estate in France, owned by members of the Rothschild family since the 19th century. The name Lafite comes from the Gascon term "la hite" meaning "small hill"....
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
Asset
In financial accounting, assets are economic resources. Anything tangible or intangible that is capable of being owned or controlled to produce value and that is held to have positive economic value is considered an asset...
markets.
Liv-ex Fine Wine Indices
Liv-ex publishes five different wine indices. The prices that are used to compute the index are wines in bondWines in bond
Wines in bond, or simply in bond, are purchased wines held in a bonded warehouse, which have not passed through customs, with no Duty and VAT paid on them....
in London, priced in Pound sterling
Pound sterling
The pound sterling , commonly called the pound, is the official currency of the United Kingdom, its Crown Dependencies and the British Overseas Territories of South Georgia and the South Sandwich Islands, British Antarctic Territory and Tristan da Cunha. It is subdivided into 100 pence...
. In their construction these indices are similar to a stock market index
Stock market index
A stock market index is a method of measuring a section of the stock market. Many indices are cited by news or financial services firms and are used as benchmarks, to measure the performance of portfolios such as mutual funds....
. 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 tracks the daily price movement of the most heavily traded commodities in the fine wine market - the BordeauxBordeaux wine
A Bordeaux wine is any wine produced in the Bordeaux region of France. Average vintages produce over 700 million bottles of Bordeaux wine, ranging from large quantities of everyday table wine, to some of the most expensive and prestigious wines in the world...
First Growths. It includes only the ten most recent vintages (excluding futures, currently 1999-2008), with no other qualifying criteria applied.
Liv-ex Fine Wine 100 Index
The Liv-ex Fine Wine 100 Index is the fine wine industry’s leading benchmark. It 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. As of June 2011, the index was composed to 95.0% of red Bordeaux, to 2.0% of Champagne, to 1.7% of red Burgundy wineBurgundy wine
Burgundy wine is wine made in the Burgundy region in eastern France, in the valleys and slopes west of the Saône River, a tributary of the Rhône. The most famous wines produced here - those commonly referred to as "Burgundies" - are red wines made from Pinot Noir grapes or white wines made from...
, to 0.9% of white Bordeaux, to 0.3% of red Italian wine
Italian wine
Italian wine is wine produced in Italy, a country which is home to some of the oldest wine-producing regions in the world. Italy is the world's largest wine producer, responsible for approximately one-fifth of world wine production in 2005. Italian wine is exported largely around the world and has...
and to 0.1% of red Rhone wine.
Liv-ex Claret Chip Index
The Liv-ex Claret Chip Index tracks the top-scoring BordeauxBordeaux
Bordeaux is a port city on the Garonne River in the Gironde department in southwestern France.The Bordeaux-Arcachon-Libourne metropolitan area, has a population of 1,010,000 and constitutes the sixth-largest urban area in France. It is the capital of the Aquitaine region, as well as the prefecture...
First Growth
First Growth
First Growth status refers to a classification of wines primarily from the Bordeaux region of France.-Bordeaux reds:The need for a classification of the best Bordeaux wines arose for the 1855 Exposition Universelle de Paris. The result was the Bordeaux Wine Official Classification of 1855, a list...
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
Robert Parker
Robert Parker may refer to:*Robert Parker , English Puritan scholar and divine*Sir Robert Parker, 1st Baronet , English politician; Member of Parliament for Hastings, 1679–1685...
. 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 BordeauxBordeaux wine
A Bordeaux wine is any wine produced in the Bordeaux region of France. Average vintages produce over 700 million bottles of Bordeaux wine, ranging from large quantities of everyday table wine, to some of the most expensive and prestigious wines in the world...
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 BordeauxBordeaux wine
A Bordeaux wine is any wine produced in the Bordeaux region of France. Average vintages produce over 700 million bottles of Bordeaux wine, ranging from large quantities of everyday table wine, to some of the most expensive and prestigious wines in the world...
wines, although it also includes wines from Burgundy
Burgundy wine
Burgundy wine is wine made in the Burgundy region in eastern France, in the valleys and slopes west of the Saône River, a tributary of the Rhône. The most famous wines produced here - those commonly referred to as "Burgundies" - are red wines made from Pinot Noir grapes or white wines made from...
the Rhone, Champagne, Port
Port wine
Port wine is a Portuguese fortified wine produced exclusively in the Douro Valley in the northern provinces of Portugal. It is typically a sweet, red wine, often served as a dessert wine, and comes in dry, semi-dry, and white varieties...
, 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. 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 1855Bordeaux Wine Official Classification of 1855
The Bordeaux Wine Official Classification of 1855 resulted from the 1855 Exposition Universelle de Paris, when Emperor Napoleon III requested a classification system for France's best Bordeaux wines which were to be on display for visitors from around the world...
, emulating the original method while using modern price averages from the last five vintages (2003-2007). The list was assembled applying Médoc
Médoc
The Médoc is a region of France, well known as a wine growing region, located in the département of Gironde, on the left bank of the Gironde estuary, north of Bordeaux. Its name comes from Medullicus, or "country of the Medulli", the local Celtic tribe...
and Pessac-Leognan
Pessac-Léognan
Pessac-Léognan is a French wine appellation, within the Graves subregion of the Bordeaux wine region. Both red and white wine is produced within the appellation, which consists of 10 communes: Cadaujac, Canéjan, Gradignan, Léognan, Martillac, Mérignac, Pessac, Saint-Médard-d'Eyrans, Talence and...
wines with a minimum production of 2000 case
Case (goods)
A case of some merchandise is a collection of items packaged together. In the United States, typically a standard case contains a certain number of items depending on what the merchandise is. For consumer foodstuffs such as canned goods, soda, cereal and such, a case is typically 24 items,...
s, disregarding any second wine
Second wine
Second wine is a term commonly associated with Bordeaux wine to refer to a second label wine made from cuvee not selected for use in the Grand vin or first label...
s that would qualify.