Fine wine investment

Wine investment spans back far before the mid-1990s, with collectors purchasing more than they intended to drink with an eye on profit margins, but it only truly became a global sensation at this point.

Since then, prices have scaled steadily by 15% per annum on average over the past quarter of a century. Recently the 2009 and 2010 vintages in the traditional wine regions have brought the market to a state of unprecedented strength. Demand for top wines is incredibly high and confidence is soaring.

One of the benefits of fine wine investment is its stability – the correlation between fine wine markets and the wider financial market is fairly limited. This resilience when compared to more traditional markets is a huge advantage. Wine, as a physical, luxury product is more stable than gold. Supply is inherently limited; top estates only produce limited amounts of cases, and this supply is constantly diminishing. As supplies disappear, prices soar as collectors look to secure the remaining quantities before the uniqueness of the vintage is gone forever.

Advantages of wine investment

Supply and demand underlies the advantage of the wine investment market. Altogether there are only about 75 investment grade labels, and their production remains essentially static. These estates cannot yield any more wine from their own fixed terroir, which is itself responsible for the unique characteristics of the wine in question.

In terms of demand, this is growing as the number of high net worth persons seeking to collect and drink these wines is increasing. The result is that prices are elevated steadily; the caveat being that if there happen to be more sellers than buyers, as happened at the end of 2008, then prices will fall. Overall blips like these are unusual, and the investment market for fine wines is continually growing.

A final bonus is that as fine wines enter their drinking window they begin to be consumed. This makes them steadily rarer, bumping up prices considerably. This is an investor’s dream situation. As such, fine wines are an improving asset.

Given that it is also a wasting asset, it doesn’t generally attract Capital Gains Tax. Furthermore, if you keep the wine in bond you don’t have to pay Duty and VAT.

For more information, see the following: Bordeaux En Primeur 2010 Report | 2010 Bordeaux En Primeur Review | Quotes on En Primeur Bordeaux 2010 Vintage | 2010 Bordeaux En Primeur Quick Overview | Bordeaux 2010 En Primeur: Market Trends and Pricing | En Primeur Ltd Client Services & Benefits | North Rhone 2009 En Primeur Report | Rhone - Wine Region of the Year 2010 | Southern Rhone 2009 En Primeur Report | Wine Investment (Asian Market) | Fine Wine Investment

Click here to see our 2010 Bordeaux En Primeur wine list and pricing.