When it comes to fine wine investment the trio of Tom Gearing, chief executiveof Cult Wines, James Shakeshaft, chief executive of Vin-X Fine Wine Investment, and Callum Woodcock, chief executive of WineFi are very much in the weeds of what is really happening out there on the fine wine trading floor. All are agreed that Trump’s Tariffs have made those weeds even harder to navigate through and the volatility in the world’s financial markets are very much mirrored in what they are seeing in fine wine investment.
We also have to remember the situation in the fine wine world was already going through difficulties before Trump got his tariffs’ abacus out.
Cult Wines' Tom Gearing says the fine wine investment market is still reeling from the now withdrawn 200% tariffs threat from President Trump on French wines to the US
As Gearing says: “2024 for everyone was a really tough year in fine wine investment circles, coming off the back now of nearly two years of underperformance resulting in buyers not coming to the market and a more general lack of liquidity.”
What makes the timing of the tariffs so frustrating, adds Gearing, is that “2025 started with a more positive tone, tied in with Chinese New Year which was probably above expectations after the Asian investor base having been fairly absent”.
“Then February came around and wholesale and B2B business was actually even higher for us than January,” he adds.
There was a feeling at the start of the year that investors were returning to the market and there was value at the current price levels, with good market depth and liquidity.
Vin-X’s Shakeshaft says we should not be surprised by what Trump has done. He explains: “We shouldn’t forget that Trump placed tariffs on fine wine back in 2019, imposing a 25% tariff on imported wines from France, Germany, Spain and the UK under Section 301, which applied to all wines below 14% ABV (Italy and Champagne were exempt).”
The result being that in 2020 French wine exports to the US dropped by 14%, resulting in a loss of approximately €400 million from the market.
Show stopper
But even those fearing the worse from Trump could not have expected the initial 200% tariffs announced on French wines to the US that he initially announcement in March.
“That was a show stopper of epic proportions and would be catastrophic for the fine wine market. So much so, that I wouldn’t see the market recovering from it,” says Gearing, particularly when you consider the US is the number one export country for both Champagne and Bordeaux.
James Shakeshaft says the fine wine world would have been seriously damaged if Trump's 200% tariffs on French wine had gone ahead
If Trump had carried out his threat of a 200% tariff Shakeshaft claims it would have ripped 70-90% out of French fine wine sales to the UK. Champagne would have gone into a major decline, Italian wines would have seen a significant fall in value and US consumers would be faced with massive price hikes and European wineproducers would have suffered multi billion dollar losses.
What happens next?
Now that Trump has rowed back on the 200% threat there is now some level of positivity in the fine wine market. Particularly in light of what could have been. By comparison a 20%, or even 25% tariff, would be digestible within the fine wine industry.
Whatever happens down the line Woodcock at WineFi believes the fine wine investment landscape is likely to be “significantly different” and just the fear of tariffs will force some change in the sector. He says: “There should be a genuine effort from chateaux to cut release prices which could finally provide the reset Bordeaux needs to re-engage investors.”
Much rests on the performance of Bordeaux en primeur as Gearing explains: “The 2024 release might be the most severe time to release it, with so many mitigating factors, even in comparison to 2019 during Covid. But this year’s en primeur has the ability to capture and totally dominate the whole fine wine world for a six to eight week period and a well priced 2024 vintage could really help to reset the market.”
Shakeshaft, who is recently back from the en primeur tastings in Bordeaux, agrees:
“There is real potential for Bordeaux. This is the year it can make a huge impact.”
He adds: “Producers are very aware of the road blocks the market is facing. Between Trump tariffs and a reduction in young consumers, the producers are looking to price the 2024 vintage accordingly to both counter the tariffs and entice a new generation of wine drinkers”.
Where’s the value?
Shakeshaft says it is worth looking back to 2019 when the fine wine worldfaced a similar crisis and we saw “opportunities in the Italian and Champagne markets”.
He explains: “Champagne consumption remains high so that creates high demand. Previous tariffs saw growth in awareness of Tuscany and it remains extremely sort after. Napa also has potential if your wines are already held in the UK and then there is Bordeaux.”
Winefi's Callum Woodcock says there are areas to be positive about in fine wine trading
Woodcock sees value in “mature back vintages – particularly those already held in bond or with strong global distribution channels, as they face little downside risk from proposed tariffs given they are already in circulation”.
He believes there that “with price stability we can see, based on our data, a potential market correction imminently, offering investors the opportunity to enter the market at an optimal time”.
Gearing agrees: “If we have increased stability in markets and tariffs are clearly set out (20%), andwe see Bordeaux en primeur producer prices set at reductions of 30% (based on a 20% tariff scenario) then actually the tariff announcement inadvertently could create liquidity, bringing back buyers and a catalyst to upward trajectories in the market.”
In summary
So whilst Trump has thrown a spanner in the works of the fine wine market, the overriding view appears to be that if we get clear instruction on the tariffs and that they are 20% or below then the market can digest this and move on.
It looks very much like Bordeaux en primeur holds the key once more, but even more so this time around with the potential to stimulate global fine wine investing markets too in a highly changeable landscape.
It would be prudent for all investors to look to Bordeaux producers and price releases for the 2024 vintage, whilst keeping more than half an eye on the Trump administration for further tariff announcements.
* You can read more fine wine investment advice from Andrew Lofthouse DipWSET at his website The Norther Wine Guy.
