There are two major reasons to invest in wine:
Firstly as an investment in future drinking - buying young wines at the initial release price which, when mature, would be considerably more expensive to buy.
As a strictly financial investment - buying wines with the sole intention of reselling later for a profit.
For many people who keep a cellar, both factors will influence investment.
The global demand for fine wine, which is produced in very small quantities, has increased enormously over the last two decades. Wine can, and often has, outperformed the FTSE 100 and the Dow Jones, offering significant returns without the volatility of the stock market.
Using the data available in Wine-Searcher's database we have looked at the change in prices of first growth Bordeaux over the period June 2001 to June 2006. Generally, the data shows that:
even in the best vintages, prices of individual wines rise at a different rate.
the absolute price of the same wine differs substantially across vintages, even for vintages which are considered to be equivalent in quality.
prices of wines, whilst generally showing a rise, can also fall.
Below are examples of some first growth Bordeaux vintages:
1982 Bordeaux
The 1982 vintage is described as 'exceptional' throughout Bordeaux and is the vintage of 80s. The wines are now mature.
Table 1: 1982 Vintage First Growth Bordeaux. Price Per Bottle in USD between June 2001 and June 2006
Prices have increased over the period, by as much as 123% in the case of Ch. Lafite (the lowest growth rate is Ch. Margaux at 58%). However, it should be noted that not all the wines have increased in value at the same rate.
1990 Bordeaux
1990 was a large (one of the largest crops ever harvested in Bordeaux) and successful vintage.
Table 2: 1990 Vintage First Growth Bordeaux. Price Per Bottle in USD between June 2001 and June 2006
The price increases are less variable between the wines than the 1982 vintage. The biggest rise, the Ch. Haut Brion, rose by 90%. The Ch. Latour, on the other hand, shows a rise of only 41%. Note that the overall price of the wines is lower for the 1990 vintage than it is for the 1982.
Wine Futures
Wine Futures (also known as "En Primeur") refers to buying wine after it is made, but before it is bottled. Cask samples of wines are made available for tasting to wine journalists and large wholesale buyers in the spring following the vintage. The brokers and merchants sell on the wine to their customers. The wine is generally bottled and shipped around two years later.
In good vintages, wine futures can offer the investor the greatest return; the initial release prices are usually the lowest at which the wines will ever be sold. However, when buying wine futures it is strongly recommended that you deal only with established and reputable retailers and importers.
personally i own 24 bottles of Penfolds Granges 2002 at the price of $530/btle which was risen from the price of $480 over the previous years. A more complete review will be posted soon.
regards,
ryan
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