Liv-Ex, the marketplace that undervalues Bordeaux Grands Crus?

Friday September 10 2021 by Vitisphere

 “Liv-ex is totally neutral and objective. We have no stocks and do not sell wines. Our information is completely independent”, says Anthony Maxwell. “Liv-ex is totally neutral and objective. We have no stocks and do not sell wines. Our information is completely independent”, says Anthony Maxwell. - Photo credit : Bordeaux Tourisme (Steve Le Clech)

Could this be a case of Perfidious Albion? Some Bordeaux negociants are increasingly voicing only thinly-veiled irritation at the London International Vintners Exchange, better known as Liv-Ex. The platform has been calling the shots for market prices of fine wines for twenty years. Its critics feel Liv-Ex has one major flaw: it chronically under-values the top Bordeaux labels, causing the market to follow a bearish price trend and criticise certain increases. This year’s En Primeur campaign illustrated the point, as shown in a much-read article in The Drink Business.

When you create new, transparent things, there are always people in the [wine] industry who like them and others who dislike them. Some people think our prices are too low, others think they are too high”, says Liv-Ex director Anthony Maxwell, putting the criticisms into perspective. Maxwell feels “the key with Liv-Ex is transparency. The prices are not our prices, they are those of our professional merchants. We don't control anything, everything is done completely independently and transparently”. The market prices displayed by Liv-Ex are based on transactions recorded internally in the past and offers potentially available. In both cases, the platform specifies the volumes involved and the dates of the transactions.

The issue for Liv-Ex's Bordeaux critics is that only the site's 550 subscribers have access to the details of transaction volumes and dates that allow them to judge the significance of the price displayed. And even for them, there is still the unknown factor of the type of traders involved, as the price is not the same depending on whether a trader is selling to a colleague or to an American or Japanese distributor. “We are totally transparent about volumes, dates and prices. We display the available price of a European stockholder for an original case live”, claims Maxwell, referring to a market price in the same way as “a market price among brokers”.

But among Bordeaux negociants, critics point to the contradictory transparency and opacity of Liv-Ex, which is seen as a useful bellwether, but nevertheless incomplete... biased even. “Liv-Ex is an English site, whose clients have a vested interest in lowering prices”, complained one Bordeaux trader who did not wish to be named. Liv-Ex’s director pointed out that for the past 20 years his clients have been British as well as from Bordeaux, with “about fifty merchants” from Gironde, not counting the brokers and châteaux who have subscribed.

 

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