As we approach the end of a particularly challenging year, I am writing to thank you for your continued support, and update you on recent and coming developments at Liv-ex.
Many of us have had to adapt to the challenges thrown at us by 2020: Covid-19, US Tariffs, and Brexit uncertainty. Indeed, Brexit, in particular, has preoccupied us at Liv-ex in the last 12 months. I have been working closely with our trade body in the UK, the Wine and Spirits Trade Association (WSTA), and other wine businesses, to encourage the UK government to act with the interests of the wine trade in mind. We have had some success, including the delay in implementation of a particularly onerous import form – the VI-1 – but there is still a lot of work to be done.
Regardless of the outcome of the UK’s negotiations with the EU, it is inevitable that trading wine in Europe will become more complex and costly once the UK leaves the single market in January. If you attended one of our Brexit webinars, you’ll have seen that we have made a big investment to ensure that there will be very little change in how you trade wine on Liv-ex come January. We have set up a legal entity in the EU, moved some activities (like photography) to Europe, and reorganized many of our systems and processes.
While we have absorbed many of the complexities, we cannot unfortunately absorb all of the costs. In the past 10 years, the average fee invoiced for a trade on Liv-ex has fallen by 70% as our investment in technology and logistics has made it economic to trade ever smaller lot sizes on the platform. Cutting the cost of trading has been our overriding objective since starting Liv-ex 21 years ago, but next year we are going to need to increase prices to accommodate these higher Brexit related costs. Bronze and Silver members will see commission rates rise to 2.5%. For Gold members, commission will remain at 2%, but the data consumption limit will fall from 500k to 100k lookups. In all packages the settlement fee will increase from £4 to £6 (and from £8 to £12 if we collect from you).
Despite the headwinds in 2020, the wine trade has continued to serve customers around the world. This has been reflected on Liv-ex, where the membership has grown to nearly 500 merchants and the value of live bids and offers has exceeded £80m in more than 16,000 wines for the first time. More and more members are now also taking advantage of trading automation, which now accounts for more than a third of all trade on the platform.
Our website and product offerings have continued to develop. Last year, you told us that we needed to improve the search function on the trading platform. You can now search using a number of advanced filters, or by vintage range, to find the stock you need to buy or sell. The LWIN database was also significantly upgraded to include intuitive display names and vast pool of attributes, which you can now call via API. In our most recent survey, you told us that you wanted us to make it easier to track wines of interest on the platform and find information on your recent trades. We intend to address these requirements in the months ahead and will also be investing in our written content and data analytics.
On behalf of all at Liv-ex, may I thank you again for your support in the last year and, if it is not too early, wish you a very Happy Christmas and a prosperous New Year.