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Fine wine investors have been left with little to toast this year, after prices for top-end Burgundies and vintage Champagnes fell sharply as demand from Chinese buyers dried up.

The price of Burgundy decreased 14.4 percent this year until the end of November, according to WINE exchange in Liv-ex’s Burgundy 150 index. Vintage Champagne fell 9.8 percent while a broad Bordeaux index lost 11.3 percent.

The falls mark the second consecutive difficult year for the fine wine market, which has been hit in 2023 by higher interest rates – which make non-yielding assets such as wine less attractive to investors – and reduced demand from Asia, traditionally a major buyer of French red wine .

“It’s very difficult,” said Gregory Swartberg, chief executive of London-based wine investment firm Cru Wine. “November (2024) is one of the worst months of the year. We’re not out of the woods yet.”

Liv-ex’s overall Fine Wine 100 index is down 9.2 percent this year through the end of November, while global stocks are up 20 percent over the same period.

The losses are in stark contrast to the market boom during the coronavirus pandemic. Even as restaurants close during the lockdowns, retail investors, flush with savings and with time on their hands, are flocking.

Unusual weather patterns linked to climate change – hot weather early in the growing season, followed by brutal cold that killed the buds – also limited the supply of new wine.

Those are the profits that the prices of vintage Champagne and Burgundy even sometimes outpaced the gains from rising equity markets and technology stocks.

However, some in the industry believe that prices have risen too quickly, setting the market up for a fall.

“This bear market is a long-overdue correction after an unprecedented bull market during the pandemic,” said Callum Woodcock, chief executive of wine investment platform WineFi.

The market has also been hit hard by declining demand from Chinese buyers, who have snapped up top-end Burgundies in recent years but are now curbing consumption as the domestic economy falters.

Investors who bought alternative assets such as wine in recent years as a way to diversify their portfolios have become more risk-averse because of the uncertain economic outlook, said Tom Gearing, chief executive of investment firm Cult Wines and previously a finalist in the UK version of The Apprentice.

Among the big-name wines that have suffered this year is Château Lafite Rothschild’s Carruades de Lafite, whose 2021 vintage is down 29 percent this year to £1,640 for a case of 12, according to Liv-ex. Its 2012 vintage dropped 42 per cent to £1,740.

Among Burgundies, Domaine Georges Roumier’s Bonnes Mares Grand Cru 2020 fell 44 per cent to £11,529 a case. Champagne house Louis Roederer’s 2015 vintage fell almost 17 percent.

It could have been worse. Some industry insiders point to sales to Asian collectors, which they say will further weaken prices in the region. Many European producers fear that US president-elect Donald Trump will impose trade tariffs, as he did on some European wine imports during his first term in office.

In addition, the Bordeaux wine industry is called first campaign — an annual spring festival where new wines are scored by critics and can be purchased before bottling — proved unsuccessful. That’s because buyers often find that, instead of buying what could be a future wine, they can only buy mature wines that have already been bottled on the secondary market at a lower price.

Producers in the region now face the challenge of how to price next year first campaign, which will feature the 2024 vintage. After an unwelcome mix of mildew, heavy rain and cooler temperatures, it was an “absolutely terrible harvest across the board”, according to Tom Burchfield, head of market intelligence at Liv-ex.

Michael Saunders, chief executive of Coterie Holdings, which owns wine merchant Lay & Wheeler and wine cellar Coterie Vaults, and was recently in Bordeaux meeting producers and retailers, said: ” There is little confusion as to what the right course of action is.”

Despite the widespread state of gloom in much of the industry, some investors are using this year’s price drop as an opportunity to buy higher-quality vintages at knockdown prices.

Cru Wine’s Swartberg said he is buying, and advising his clients to buy, Krug 1996 and Dom Pérignon 1996, which he describes as “amazing vintages” of Champagne and which he believes are good because of the lack of supply.

Between Bordeaux he bought 2000, 2005 and 2009 vintages of wines such as Château Angelus and Château Cheval Blanc, and he acquired new Burgundies from Domaine Romanée Conti, Rousseau and Dujac.

“More and more people are starting to take advantage of the current market conditions,” he said. “It was unheard of two years ago to buy these wines at these prices.”