The chart below shows a clear correlation between the performances of the Liv-ex Fine Wine 100 Index and the China Producer Price Index (PPI) which measures changes in the price of goods sold by manufacturers. When PPI rises, it is expected that prices for consumers – measured by the Consumer Price Index – will follow as retailers pass on increasing costs. These price pressures are usually associated with rising demand, a sign of growth.

China became a key consumer of fine wine from 2009 onwards, and the correlation below underlines the country’s importance in moving the market over the years that followed. It clearly shows that fine wine prices rose – and then fell – with the Chinese economy. Before China’s entrance into the market, there was little correlation.

Of course, this is only part of the story: demand for fine wine in China was in part curtailed by the clamp-down on gift giving – a key tenet of the new regime’s anti-corruption campaign.

With the Liv-ex 100 now having returned to the same level as it was five years ago, the market appears to have flushed out the “China effect”. Therefore looking forward, the big question is whether it will be the traditional markets of the UK, Europe and USA that determine the future path of the fine wine market – rather than China.