The drinks sector boasts some big-ticket, luxury products, like very old single malts and the most exclusive Bordeaux wines, and some very wealthy, high end consumers to go with them. Chris Losh looks at how this end of the market is faring during the downturn, and to what degree the big spenders are cutting back.

There is arguably no better barometer of the financial health of the wealthy than the drinks market. Whether it's Russian oligarchs buying murderously expensive bottles of vintage Macallan in cash, or Wall Street high rollers shelling out on cases of first-growth claret, when business is good, the upper end of the drinks business feels good too.

But what about now, as Europe and particularly the US surveys the economic wreckage of a decade of ill-conceived financial speculation?

Logically, you would expect it to be a disaster zone. In fact, while the situation in London and New York is clearly nowhere near as good as it has been, it is not an unmitigated disaster either.

Of course, some investors have lost large sums of money, with 2005 first growths seeing their value tumble by up to 40% in a matter of months. Those who bought at the top of the market and have recently had to liquidise their assets will be thousands of dollars out of pocket.

Having said that, between 2005 and mid-2008, the market grew, according to the Liv-Ex fine wine exchange, by about 300%. Seen in this context, the 40% fall looks less than disastrous.

Indeed, Adam Brett-Smith of London fine wine merchants Corney and Barrow is not alone in viewing it as a "necessary correction" of an overheated market "that was long overdue".

Not only that, but it's very easy to get a somewhat warped perspective on any slowdown in fine wine buying by viewing it through Western eyes. Oliver East of London-based fine wine merchants Farr Vintners admits that while the US has "not been big business" for the firm for a while, and it is doing "less business in the UK than we did", the Far East is positively booming.

"Every day we get to work, turn on our computers and discover that our Hong Kong office has had another bumper day, with large orders of top wines," he says.

The Chinese, it seems, still have money. And the top auction houses are doing what they can to mine the wealth. Sotheby's recently held its first ever Hong Kong wine sale, while Christies returned to the region for the first time in seven years, its Hong Kong sale last month netting an impressive HK$28m (US$3.6m).

With the heavily indebted desperate to release cash, there has arguably not been a better time to buy for many years.

The situation has been helped by the Bordelais having an unusual outbreak of reasonableness. Prices of this year's en primeurs were down 38% on average, which was enough to stoke interest from cautious markets. "The 2008 en primeur campaign was a solid success," says Brett-Smith. "Customers realised that there was fun to be had [at these prices]."

In other words, providing sellers are realistic in their pricing, for the classic wines, at least, the market is still positive.

Where the difficulties occur is with expensive products with less of a track record - particularly in the US which has no shortage of over-hyped small-production wine estates of unproven pedigree and a sudden shortage of potential buyers.

While cult Napa wines such as Screaming Eagle, Opus I and Stag's Leap are still able to sell, some of their deluxe competitors are hurting. Importer Billington Wines, for instance, has just closed its Havens Winery, and is declaring bankruptcy. It is unlikely to be the last.

"There are other wineries that are close to the edge," says one Californian wine producer. "If we get a recovery, it is likely that many of them will be fine. There are a certain number of them, however, who have taken very long positions in grapes and wine, especially Pinot Noir, at very high prices that will be seeing the greatest challenge."

The evidence seems to bear this out. While the sub-US$6 and sub-$10 price brackets are still in growth in the US, sales over $30 a bottle are down by an estimated 15-20%. One Californian restaurateur, who used to reckon on selling four bottles of $100+ Napa Cabernet a week says he has not sold one in the last month.

No surprise in this climate that Champagne is hurting. Prices are being cut, and there are rumours of containers of Dom Perignon being returned back across the Atlantic, while Krug, according to one industry observer, "has practically disappeared".

Conspicuous consumption, it seems, is out, which leaves products that rely heavily on image (whether super deluxe vodkas or tiny, young wine estates) looking vulnerable.

But for those producers with deep pockets, a long-term view, and a product with a genuine story, the current situation is no more than a spot of turbulence to be weathered.

"Now would not be the time to launch a deluxe blended whisky," says the head of one large spirits company. "But that doesn't mean we don't have one lined up for when the market improves."

Indeed, the last 12 months seem to have ushered in not just reduced consumption, but a different type of consumption. In terms of the actual products that are selling, it is defined by one fine wine merchant as "a flight towards that which is proven to be good".

In terms of the way in which it is drunk, James Samson, brand manager for Louis Roederer in the UK, believes there has been a sea-change in the way people are drinking prestige Champagnes, with "greater discretion in the manner of celebration".

Could this, then, be the moment when the Noughties obsession with ostentation and image finally gave way to worth and tradition? Are we witnessing the death of bling?