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Fine wine enters summer lull

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Despite substantial falls in most major equity markets, fine wine prices remained broadly flat in June, pointing to resilience in the fine wine market.

 
The Wine Investment Fund (TWIF) found buying interest generally concentrated on the 2000 vintage. The returns on the first growths were all closely bunched, with Latour just managing to break into positive territory. The others all showed a fall of around 0.5 per cent on the month.  The top right bank wines fared better, as they have done throughout 2013: in June both Pétrus and Cheval Blanc rose by around 0.5 per cent.
 
There were signs of a revival of the American market as the annual charity “Auction Napa Valley” raised USD16.9m, 61 per cent more than the previous record set in 2005.
 
Following the more than disappointing en primeur season which is now over, the overall impression is now of a market seeking direction.  Demand remains reasonable, but participants have limited appetite for taking positions.  This seems unlikely to change over the summer as the wine market enters its traditional seasonal lull.
 
The threat of import duties on wine which came under the spotlight in June as China muted the possibility of increasing taxes as part of a wider trade dispute with the EU, appear to have receded.  The timescale for any move (if the dispute is not settled) has been shifted well into 2014, and the extent of any increase may be less than first thought.  Meanwhile, the signals from India are also positive: federal import taxes may be cut more sharply than expected, and could be accompanied by moves to standardise state duties.
 
“We are delighted to be celebrating The Wine Investment Fund’s 10th anniversary this year. We have been through volatile markets and world-changing events, and many funds have disappeared (not just wine funds).  We believe that our clearly defined investment process and our genuine independence (which allows us to operate free of any conflicts of interest) have been fundamental to our longevity and success and we look forward to the next ten years with confidence and optimism,” says Andrew della Casa, founding director, TWIF.

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