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Highlight: The case for investing in fine wine
Wine has seemingly fared well compared with other options within the alternative investment sphere. While fine art has risen by 9 per cent, collectable stamps by 61 per cent and residential property by 118 per cent over the decade to December 2009, some premium cases of wine from Bordeaux have risen by almost 900 per cent, according to fine wine exchange Liv-ex.
This trend has been picked up by auction houses Christie’s and Sotheby’s, which have been holding fine wine auctions in Hong Kong since February 2008, when the government removed duties on wine.
Indeed, Sotheby's sold all but five lots in an auction in Hong Kong in October, raising HK$61.5m (£4.89m) from 1,010 lots. This far exceeded the presale estimate of HK$47.8m. The final lots were later sold privately.
Interestingly, only 1 per cent of lots went to buyers from outside Asia, according to Sotheby’s. Mainland Chinese made up the bulk of bidders, along with buyers from Hong Kong, Taiwan and Singapore.
So, what can we expect in 2010? According to Mr Williams, several stories look set to play out this year.
"With economic recovery underway, the 'consumption' effects on the market will return," he says. "Vintages such as 1982, 1990, 1995 and 2000, which are now at or approaching maturity, will also see increasing demand from consumers. They are certain to rise in value.
"We are also currently experiencing a big return in demand for very old vintages and collectibles."
He also predicts the 2009 en-primeur vintage in Bordeaux will generate a lot of interest because of its underlying quality. "We await the chateaux pricing with bated breath," he says.
Berry Bros & Rudd is also excited about the 2009 Bordeaux vintage. "Given the quality of the fruit harvested in September last year – our Bordeaux buyer, Max Lalondrelle, commented that 'even the pips taste ripe' – there is every chance that we have a vintage of remarkable quality on our hands," reports Mr Fowler.
In short, the basic principle of supply and demand seems likely to ensure wine will continue to appreciate in value. With more buyers entering the sector, a greater level of volatility is to be expected in the short term, but, overall, top-end wine should prove to be a good investment if held over the long term.
However, potential investors should undertake their own research before opting to include wine in their broader portfolio. Issues such as management fees for wine investment funds should be taken into consideration, as should the storage costs if wine is purchased privately.
Laura Hughes is a freelance journalist
