At last, we welcome the return of some positive press (FT, Forbes), regarding the short to medium term prospects for wine investment performance providing some much needed respite from the stories surrounding a couple of fraudulent operators.
Nonetheless, reports in the mainstream consumer press serve to raise awareness of the perils of using the wrong agent when dealing with wine or indeed any asset class for that matter.
While it is true that the mantra of caveat emptor or ‘buyer beware’ should be ringing loudly in the ears of any would-be investors, the impressive track record of growth seen in the wine market over the last 20 years is very hard to ignore.
Exceptional wines like the Lafite Rothschild 2003 are currently offering fantastic growth potential.
With such an uncertain economic outlook, particularly in Europe, it would be somewhat ingenuous to overlook the benefits of fine wine as a tangible asset class. It is easily stored and insured, each vintage is finite and diminishing in supply and global demand continues to grow.
On this point, it is worth noting that with the recent stimulus packages implemented in China and the US, (and the relaxing of financial regulations in China), the IMF have predicted GDP growth in China at 8.2% in 2013, up from 7.8% this year. With the inevitable inflation that will follow the sheer scale of cash injections we are seeing into these economic giants, wine can also be considered a good store of wealth as currencies suffer.
Following a four year hiatus, the US market, once the biggest buyer of classified Bordeaux before China’s involvement, is once again becoming more active. This leaves the market in far better shape for the long term than it has been at any point since the two year bull-run that followed June 2008. Greater diversity in global demand combined with the price corrections seen throughout 2011 highlight the excellent value on offer for those wanting to begin or add to a wine portfolio.
Business Membership offers unlimited access to content and a listing in our Business Directory alongside world-famous brands, from just £250 per year. Join the Vintage Revolution today!