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Viewing fine wine as a tradable commodity is nothing new. Most of us have heard the old adage of buying two cases, drinking one and selling the other – which, hopefully, ends up paying for the case you drink. Though still relevant, the fine wine trade, especially over the last 10 years, has become more sophisticated.
Fine wine is now a truly global market with a demonstrable history of performance. The Liv-ex 100 industry benchmark index has delivered 8% compound annual growth over the past 15 years. This compares favourably to 3% for UK equities (FTSE 100 Index) and 5% for US equities (S&P 500 Index). For many, it's far more useful than gold, and easier to enjoy than art. Interest in wine is growing at all levels.
Historically, Bordeaux wines have made up the foundation of the fine wine market, though a significant recent trend has seen the broadening of the market beyond this traditional core. Bordeaux made up 58.2% of the market in 2018, which was a new low, with Burgundy following behind at 14.5%.
Champagne and wines from Italy have been notably increasing their shares, growing to 8.6% and 8.1% respectively, while there has also been recent growing interest in the top wines from both Napa and the Rhône.
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Looking at a couple of examples from Champagne and Italy, it is easy to see why they have attracted attention:
- The 2002 vintage of the highly sought-after Champagne Dom Pérignon currently commands a market price of £1 480* compared to £1 070* five years ago, a 38% increase and equivalent to compound growth of 6.7% per annum. If you were fortunate enough to secure a case on release, the total increase would have been over 80%. Lucky buyers of the most recent release – the much-lauded 2008 vintage – will be hoping for similar levels of appreciation. Time will tell.
- Sassicaia is now widely accepted as one of the greatest Cabernet Sauvignon wines and this Italian ‘Super Tuscan’ is today one of the most desirable fine wines in the world. The 2015 vintage was released to the market at £1 130* and has since risen a staggering 49% in the last 12 months, to its current price of £1 680*.
Today’s collectors are in the fortunate position to be able to access and drink wonderful wines from all over the world – wines which have never been of such quality and consistency. One could argue that we are in a ‘golden age’ of wine collecting and drinking.
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Since 1698, Berry Bros. & Rudd has established trusted relationships with châteaux, domaines and négociants alike, enabling them to offer their clients unrivalled access to the world’s finest and rarest wines, whether that be for immediate consumption, long-term cellaring or investment.
If you are interested in acquiring fine wines through Berry Bros. & Rudd, on terms exclusive to Standard Bank Wealth and Investment clients, please contact your Relationship Manager.
*Source: Liv-ex.com – in bond price for 12 x 75cl bottles. |
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