Supply and Demand

The economic principle of supply and demand contends that where the supply of a product in consistent demand decreases, then the price of that product will rise.

Fine wine is an example of what is known as a finite reducing asset. The number of cases of wine produced by a vineyard in any given vintage is limited, and when one considers also that fine wine is made to be consumed, then it makes sense that those numbers will decrease over time.

Because the value of fine wine is inherently linked to supply and demand, many have considered it far more robust under negative global economic conditions than more traditional modes of investing such as stocks and shares. Wine is, after all, a tangible asset and will always retain an intrinsic value.