Far East wine market expands:
In financially uncertain times, where global equity and capital markets remain a risky prospect, investors in the Far East are instead turning their attentions to collections of fine wine.
The level of interest among Japanese, Chinese and Filipino investors is constantly on the rise. The fine wine market – long the exclusive purview of European and American cognoscenti and specialist investors – is now burgeoning with Asian investors who are attracted by the relative stability that fine wine has to offer.
During the past five years, Chinese wine consumption has grown exponentially as disposable income increases and, perhaps more significantly, as the wealthy look to wine as a form of conspicuous consumption. Chinese palates are taking a liking to wine, with its unique complexities, and the commodity is becoming steadily more appreciated.
Now, with the financial slump, wine has assumed a new role; it has switched from status symbol to a serious asset opportunity. The Philippines, the third largest drinking nation in Asia, has recently launched the world’s second largest multi-million dollar wine storage warehouse. Unsurprisingly, the wine investment market has greatly expanded as a result.
This state of affairs is a result of the strength of the wine market versus the stock market together with the historical precedent of outperformance of wine as an asset in previous economic slumps. The valuation of the yen pegged against sterling only helps matters.
“Historically a wine’s lack of price volatility has proven it to be a solid alternative to the stock market, in times of downturn. It is an asset that improves over time and it has consistently outperformed all other forms of recognised investments,” says Gavin Saffer of Premier Cru.
“Investment in wine over the last seven years has produced an average annual return of sixteen percent, easily outstripping the performance of western stock markets over the same period. What’s more, there is no capital gains tax on fine wine investment. The culmination of the history and security behind this form of investment has attracted a new breed of investor from territories spanning as far as the Philippines, seeking to step away from the traditional forms affiliated by shady human intervention and the banking sector.
Savvy Japanese investors are now placing significant orders with leading wine investment companies in order to take advantage of the ‘ripe’ market conditions. Due to its geographical positioning, London is the capital of the wine market and investors seeking top level inside advice on turning a cellar are looking to specialists who manage en primeur through Grand Cru.
It is apparent that the Chinese are drinking Chateaux Lafite as their number one choice, a wine that only the very wealthy can afford. The Chinese’s second choice seems to be Carruades De Lafite – the second wine of Chateaux Lafite. It was remarked that both Chateaux Talbot and Chateaux Palmer are favourable also.
Vintages vary, with the first growth Lafite 1982 the most popular depending on price, aside from this other popular vintages are, 86, 96, 2000, 2003 and 2005. As you can see they are drinking some very young wines like the 03 and 05. In order for one’s palette to grow and appreciate fine wine drinking young vintages is a good place to start.”
Wines from 2003 and 2005 vintages are set to be depleted all the more rapidly thanks to incipient Asian interest.