{"version":"1.0","type":"rich","provider_name":"Acast","provider_url":"https://acast.com","height":250,"width":700,"html":"<iframe src=\"https://embed.acast.com/$/62301a5c63c97500122f8a76/62b2c633d707fb0012d44f79?\" frameBorder=\"0\" width=\"700\" height=\"250\"></iframe>","title":"Making Fine Wine Transparent, Efficient, & Safe w/ James Miles, Liv-ex","thumbnail_width":200,"thumbnail_height":200,"thumbnail_url":"https://open-images.acast.com/shows/62301a5c63c97500122f8a76/show-cover.jpg?height=200","description":"<p>Seeing the opportunity of bringing solutions in the financial markets to fine wine, James Miles, CEO and Co-Founder of <a href=\"https://www.liv-ex.com/\" rel=\"noopener noreferrer\" target=\"_blank\">Liv-ex</a>, launched the London International Vintners Exchange (“Liv-ex”).&nbsp;Through standard contracts, guaranteed trades, and a plethora of data, Liv-ex is making the fine wine market more transparent, efficient, and safe.&nbsp;Though the Liv-ex 100 and 1000 indices are what it may be best known for, it is an end-to-end trading platform. Listen to James explain it all as well as market trends on this episode of XChateau!&nbsp;</p><p><br></p><p><strong>Detailed Show Notes: </strong></p><p>Liv-ex background</p><ul><li>Founded in 2000</li><li>Based on the similarities between wine and stocks, leverages financial solutions for wine</li><li>Mission - make the fine wine market more transparent, efficient, and safe</li><li>An exchange for wine - London International Vintners Exchange (Liv-ex is the acronym) - an end-to-end solution to buy and sell wine, including price discovery, trading, and logistics to ship wine globally</li><li>Customers (merchants) in 42 countries, Liv-ex doesn’t compete and sell to restaurants, hotels, or represent producers</li></ul><p>Trading on Liv-ex</p><ul><li>An order matching system - customers place buy and sell orders on the platform</li><li>Bids are firm, cannot cancel orders - a new concept for wine, which is usually “subject to availability”</li><li>Created standard contract for wine trading - includes condition, when to pay, and when it will be delivered</li><li>The order book is a queuing system - 1st based on price, 2nd by the time of bid, the book is always open</li></ul><p>Wine traded on the platform</p><ul><li>2010: £55M traded across 1,000 wines -  97% Bordeaux, top 10 Bordeauxs + DRC = 70%</li><li>2022: £100M traded across 15,000 wines - Bordeaux ~35%, Burgundy, ~25-30%, Champagne / Italy ~10%, CA growing; France still ~70-75%</li><li>Transactions are growing ~20% per year, but avg price is declining</li></ul><p>Merchants</p><ul><li>&gt;580 merchants on the platform</li><li>2022 - UK ~35%, Europe ~40%, USA - ~15%, Asia ~10%</li><li>Fastest growth - USA, Europe, slowest - Asia</li></ul><p>Provenance/condition of wines</p><ul><li>Joining Liv-ex requires review by the membership committee - look at financials, where wines are bought, etc.</li><li>Has data-sharing initiatives with customers</li><li>Has special contract for older / rarer wines (takes into account more information)</li></ul><p>Liv-ex Data</p><ul><li>Liv-ex Fine Wine 100 index - tracks most traded wines, uses production and scarcity weighting vs. just price (multiplies price by # of cases and depreciates this over time; price is mid-point of bid-offer spread or last transaction price)</li><li>Liv-ex 1000 - price-weighted, top 100 wines and last 10 physical vintages, breaks down to regional indices</li><li>If no price from the platform takes price from customer listings or valuation committee</li><li>An active market in ~15,000 wines but tracks ~350k wines</li><li>Customers have ~$1.5B of wine actively marketing</li></ul><p>Market trends</p><ul><li>Burgundy is the big winner; Champagne &amp; Italy did well, especially w/ US tariffs</li><li>Top increases: DRC, Roumier, Leflaive, Selosse, Salon, top Italian wines / Barolos</li><li>Everything w/ a hint of Leroy doing well (e.g., Arnoux Lachaux has risen 4x having worked for Leroy in the past)</li><li>Wine has been doing well so far against macro headwinds (e.g., Brexit, tariffs, Covid, war, inflation), and physical assets are an excellent place to be</li></ul><p>Business model</p><ul><li>Membership fee - based on features used and amount of data consumed</li><li>Trading fee - 2-3% commission on both sides, usually ~5% of total trade (low vs alternatives - wholesaler - 10-20%, auctions - 25-30%, importer/agent - 30%+)</li><li>Settlement fee (per unit fee) for logistics</li></ul>","author_name":"Robert Vernick, Peter Yeung"}