Fine Wine Investment – Looking Back, Looking Forward

Investment in fine wines was a regular feature in most investment guides throughout 2009, moving out from occupying a niche market position to one that increased in attractiveness as the global financial meltdown hit regular investment assets, including stocks and bonds, unit trusts etc. In some cases, fine wine investments have outperformed other assets by more than 400%.

Global fine wine investment turnover is now over £1.8 billion a year, much of this due to increased demand from the newly rich Asian markets, particularly China. Thanks to the greater transparency in trading due to online exchanges, especially the Liv-ex Fine Wine Exchange, there has been an increase in the number of new entrants into the investment scenario. In December 2009, the Liv-ex 100 had risen by 14.7% over the previous 11 months.

With limited and diminishing supplies coupled with increasing demand, the year saw a decent rise in fine wine prices. As usual, Bordeaux led the way, with Chateau Lafite seeing a price increase of more than 50%.

The outlook for 2010 appears attractive on three counts: firstly, new investors in Asia are continuing to fuel demand for premium wines. Secondly, with the slow but steady turnaround in the economies of the U.S. and Europe, demand is picking up again. Thirdly, more people are drinking wine more regularly these days than ‘harder’ drinks. In the UK, average annual wine consumption is now estimated to be 30 bottles per person.

Will returns on fine wines in 2010 beat the 15% (Liv-ex 100) achieved in 2009? Thanks to the very favourable growing conditions, the 2009 vintage itself is expected to be a great one – so we shall see…


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