Welcome to the January 2018 Liv-ex newsletter
2017 has been the year of three B’s: Burgundy, Brexit and the broadening market. Prices for top Burgundy helped push the Liv-ex 1000 index up, while Brexit-led currency fluctuations influenced the Liv-ex 100. The market broadened as more wines than ever traded during 2017. With another interesting year ahead, all major developments will be covered on Liv-ex Insights.
Interview with Veronique Sanders
Liv-ex recently caught up with Veronique Sanders of Haut Bailly. Sanders joined the Chateau in 1998 and became General Manager in 2000. In the interview, we discuss her career, developments at the property and the 2017 vintage. To read the full interview, please click here.
New membership packages
As explained in the annual newsletter by James Miles, we have introduced new membership packages that will come into affect at your next renewal. Under the new system, we are going to bill monthly rather than annually, allowing you to spread the costs of membership throughout the year. The packages are also based around data usage. Previously, you would need an additional license to make full use of Liv-ex data products, whereas in the new model, products such as Direct Market Access, Price APIs and Wine Matcher are more accessible.
Liv-ex’s terms and conditions have been updated to reflect these changes. To view the updated document, click here. For further information on the new plans, please view our pricing chart or read the annual newsletter by James Miles, here.
Liv-ex monthly market report
Our monthly market report has been made available to members on the Silver package or above, as well as existing data licensees. This report has been running monthly for over a decade and was originally created for subscribers of Cellar Watch. Containing the latest market research and analysis, this month’s report features an extended final thought on the fine wine market in 2017. For more information, please contact your Account Manager.
2018 Settlement and Logistics guide released
The 2018 Settlement and Logistics guide has now been released. The guide contains all the necessary information about settling trades on Liv-ex. Changes this year include further clarification on SIB Passports and updates to the Hong Kong shipment price. To download the guide, please click here.
Collections from Europe will now run weekly
Due to strong demand, we have decided to extend our international collection services this year. Collections from Europe will now run weekly from the following countries: Holland, Germany, Austria, Switzerland, Belgium and France. Collections from Italy are coming soon. Full details can be found in the settlement guide.
The Sales team is pleased to welcome Théo Blet. Théo is originally from the Loire region in France and has spent the last six months working for Chateau de Parnay in the Loire valley. In his role as a Junior Account Manager, Théo will be available to help you in any way he can, be it finding trading opportunities, or simply to talk about the market.
The Data team is pleased to welcome Giannis Kerestetzis. Giannis has a Diploma in applied mathematics from the University of Athens and a Postgraduate Masters in data science from the University of Edinburgh. In his role as a Data Analyst, Giannis will be helping to collect and interpret trading data and patterns.
Liv-ex in the news
The Financial Times reported on the strength of the fine wine market in 2017, noting that returns for the year are set to outperform UK blue-chip shares and gold. Barrons commented on the top 10 price performers among the Liv-ex 1000, suggesting that ‘Burgundy is back‘, while the Wall Street Journal offered a holiday guide to wine investing.
You can find the top fine wine market news stories on our press page, here.
Thank you for reading
We hope that you’ve found this edition useful. As always, you can keep up to date with developments as they happen by visiting the Liv-ex noticeboard. If you have any feedback or questions on this newsletter, please email firstname.lastname@example.org or call +44 (0)20 7062 8788.
The 2018 Settlement and Logistics guide has now been released. Containing all the necessary information about settling trades on Liv-ex, a copy of the full document can be found below:
- Prime collections from Europe will now run weekly.
- The price for the Hong Kong shipment has been updated, effective 1st February.
- FAQs on insurance, photos, SIB Passports and best practice have been updated.
Thank you for reading
We hope that you found this information useful. For more information please contact your Account Manager, email email@example.com or call +44 (0)20 7062 8788.
Liv-ex’s terms and conditions have been updated to reflect recent changes to our pricing plans.
To view the updated terms and conditions document, please click here.
If you have any questions, your Account Manager will be happy to help you.
The Liv-ex settlement calendar for 2018 has now been released. To download the calendar, please click here.
The document contains the 2018 payment schedule. It also provides the dates you need to deliver to Liv-ex by, in order to receive payment on these dates.
Further information about Liv-ex logistics and settlement services in 2018 will be posted in early January.
For more information, please contact your Account Manager, email firstname.lastname@example.org, or call +44 (0)20 7062 8788.
I am writing to thank you once again for your continued support. As we approach the end of 2017, I would like to update you on what’s changed in the last 12 months and outline our plans for next year. In particular I want to highlight changes in the way that we are going to charge for our services in 2018.
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The fine wine market
The market in 2017 has been characterised once again by broadening trade. The days of the fine wine market (and Liv-ex for that matter) being predominantly about Bordeaux have passed. While Liv-ex has matched a record number of transactions in a record number of products, Bordeaux’s overall share of activity has shrunk by 6% to 69% in 2017. (Bordeaux’s share of Liv-ex trade was 95% in 2011.) This seems to be representative of your businesses too.
Transactions matched on the platform have increased 8% year to date to more than 16,000. The main beneficiaries have been Burgundy, Champagne, Italy and the USA. Indeed, some 19% more wines have been traded on Liv-ex in 2017 compared to last year. This has been mirrored by a large increase in choice on the platform. At the end of October, both active markets (8,000+) and the value of bids and offers (£48m) stood at record highs. Both are up nearly 50% on the same time last year.
This trend is mirrored in prices. Bordeaux has failed to keep pace with the broader market. The Liv-ex Fine Wine 1000 Index – our broadest benchmark – is up 8%, while the Liv-ex Bordeaux 500 Index has managed just 6% and the First Growths less than 5%. By contrast Champagne, Italy and the Rest of the World Indices are up by 10-11% and Burgundy by 14%. This is against a backdrop of blockbuster vintages in Bordeaux in 2015 and 2016. While this might give Bordeaux pause for thought, this broadening of market activity is an encouraging trend for the market overall.
We continue to believe that the biggest opportunity for the market lies with technology, specifically with the increasing ease of system integration. This is reducing the cost of sharing all forms of information such as prices, bids and offers, alerts and settlement instructions. Consequently, it is removing barriers to trade and opening up new opportunities to find new customers and automate inefficient processes.
As an example, until recently, the only way to place orders on Liv-ex was to ring us up or go to our website. Positions on Liv-ex would often need to be held on internal systems or offered subject to availability for fear of double selling. As many of you will know, Liv-ex has now built technology that allows you to connect directly with our platform from your own system or website, removing the need to maintain positions or manually key orders in two or more places. We call this technology Direct Market Access.
Direct Market Access (DMA) first became available in 2016 and is growing fast. At the start of the year, trades matched via DMA represented less than 2% of the total. As of the end of October, a handful of early DMA adopters accounted for a remarkable 16% of Liv-ex transactions – more than an eight-fold increase in just over nine months. With a busy pipeline of new DMA customers, this represents an exciting new opportunity for buyers and sellers alike.
Most Liv-ex services are now available in this way, allowing you to, for example, offer stock seamlessly on the platform, make Liv-ex offers available to your customers in real time or indeed to build your own exchange or marketplace around our data, trading and settlement services. Early feedback is that not only have members been excited by the sharp increase in business and the new customers that DMA attracts, but also the efficiency that it brings. Indeed, DMA is so automated that additional business comes with limited marginal cost or working capital requirement.
A key component of this new technology is the Liv-ex Wine Identification Number (LWIN). This seven digit code introduces a simple and consistent naming convention for fine wines, allowing machines to share information seamlessly. In the last year, we have made LWIN available under a Creative Commons License, which effectively makes this resource free for anyone to use in perpetuity. We hope that this will speed the adoption of this exciting new technology for everyone’s benefit.
As always, this changing landscape brings some challenges too. These are most marked in technology, because automation has resulted in an exponential increase in the number of requests that our database receives. In the last few years data requests have increased from the tens of thousands to the tens of millions every month. We have matched this by increasing investment, which will continue apace in 2018.
We have already started to rebuild our technology platform from the ground up and intend to match this with major new investments in account management, communications, data and logistics to improve the service that we are able to offer members. This will amount to an extra £2m (or 60%) per year by 2020.
We have also tried to rethink and simplify the proposition around our three core services: data, trading and settlement. This includes our pricing. As normal, many of our prices will remain unchanged, but we are going to revise the way that we charge for membership. In the new year we will introduce membership packages which will be based around data usage to align our income more accurately with our costs.
At the moment, you need an additional license to make full use of Liv-ex data and data products. In the new model, each package grants some level of access to these. This makes products such as DMA, Price APIs and Wine Matcher more accessible and enables you to share Liv-ex data with your customers without entering into a new agreement with us. Fees will be based on usage, meaning that heavy users pay more than those occasionally checking prices. We hope you agree that this is a fair way to distribute costs, and that the value added to your business by Liv-ex continues to justify any additional charges that may be incurred.
Under the new system, we are going to bill monthly rather than annually, allowing you to spread the costs of membership throughout the year. The five new membership packages start at £150 per month. There will be no change to our standard trading or settlement fees, although we have combined the old Prime fee for EU collections into the settlement fee to simplify billing. You can also continue to buy discounted commission packages annually in advance if you wish.
The new list of prices can be found here and will come into effect at your next renewal. Your account manager is on hand to discuss these changes with you and to guide you to the most cost effective package for your requirements.
On behalf of all at Liv-ex, I would like to thank you again for your support and, if it is not too early, wish you a very happy Christmas and a prosperous new year.