Fine Wine Investment Update February 2013
I have some news on the fine wine market.
The Liv-ex Fine Wine 100 rose 2.8% in January – its highest move since February 2011 and the Bordeaux 500 edged up 2.2% for the second month in a row. The First Growths saw the biggest rise, with the Liv-ex top 50 rising 3.5%. The Liv ex 50 are the last ten years vintages of first growth Bordeaux wines.
Haut Brion 2008 increased the most followed by Mouton Rothschild 1998, which has been on the move since October, same as Mouton Rothschild 2000 which has been steadily climbing since August, the Mouton Rothschild vintage 2000 is now just £800 off its peak price from May 2011.
While Leoville Poyferre 2009 according to Liv Ex prices was one of January’s top risers with a 9.5% increase, this was a Second growth wine we recommended a few months ago. Cos D’Estournel which is more expensive though same vintage 2009 and same class dropped back 5.8%.
• The Livex 100 consists of the 100 most sought after fine wines mainly Bordeaux with some Rhone, Burgundy and a select few vintages of Champagne. The Livex 50 consists of the last ten “physical” vintages of the five Bordeaux First Growths: Haut Brion, Lafite, Latour, Margaux and Mouton Rothschild.
The Wine investment fund in the UK reported that this is the best time to enter the market since 2009 and the market across the board has a potential increase of 25%, the report suggested that prices fell in early 2012, then the market started to show signs of Stability in the second half of the year then signs of a recovery towards the end.
They went on to say – The weak market has seen prices drop to levels well below the trend line and this allows for a sharp recovery, also many of the institutional selling which affected the market in 2012 have fallen away now. When I say institutional I mean the wine investment funds that were dumping wine onto the market last year due to panic selling, there seems to be no more offloading of large parcels of high end stock.
On top of all this the global market is nervous about the rising inflation because of the loose monetary policies by Central banks.
Because wine is a physical asset it can’t lose its value because of government actions therefore when there is fear of inflation fine wine is more likely to rise like some of the agricultural commodities that are on the rise right now.