A couple of weeks ago Forbes published its annual rich list. The list shows that the number of billionaires has risen from 1,226 in 2012 to 1,426 in 2013 – an increase of 16%.
In the past we have noted the correlation between the number of billionaires and the Liv-ex Fine Wine 100 Index, with demand for fine wines – and other alternative assets – closely linked to wealth creation. Yet in 2012 we noticed this correlation slipping, and in the last year the gap between the two has widened further: the number of billionaires has continued to rise despite the fine wine market’s downturn. This can be seen from the chart below, which tracks Forbes data against the Liv-ex 100. (We have converted the Liv-ex Fine Wine 100 Index to dollars to remove the effects of currency movements.)
With China one of the biggest drivers of the fine wine market, we took a look at the number of Chinese billionaires over time. Once again, the correlation that we have previously seen has weakened. Despite the rising number of Chinese billionaires – up 28% on 2012 – wine prices have fallen. Perhaps unsurprisingly, it would seem that billionaires cannot sustain the wine market alone.