Investing in fine wines is one of the most secure ways to boost your wealth. France enjoys an unrivalled reputation as a world leader in gastronomy and luxury wines. Due to its image and appeal, the fine wine market has experienced rapid and worldwide growth, further strengthened by improvements in transportation, storage and communication.
The potential of emerging international markets
For traditional clientele, fine wines are as attractive as ever. They have an enduring popularity whatever the market environment because of the history and hedonistic culture that they embody. Moreover, interest in fine wines has begun to extend to emerging economies across the globe, creating significant new trade opportunities. The considerable rate of growth of these new markets has already led to a shortage of certain chateaux wines and, consequently, sparked an increase in prices that is likely to continue.
Still uncertain of whether or not to invest in wine? Since 2005, the average price of the top 100 wines has multiplied by 3.5. Taking into account the consistent trend of worldwide consumption of Grand Cru wines, the market appears to be one of durable strength.
Supply and demand
Certain French estates and châteaux have achieved an exceptional reputation, elevating them to almost mythical status. As we know, the Earth's terrain cannot be extended and Bordeaux's celebrated vineyards cannot be expanded. This results in a limited production of French Grand Cru wines and an inevitable increase in value as the fine wine market grows. Thus a competitive supply-and-demand mechanism is created that is unique to this market.
This particular feature of the fine wine market helps explain why investing in wine has become a more than competitive alternative to traditional investment products. Wine is a consumer good and, unlike other investments, benefits from repeated purchase maintaining the supply/demand imbalance necessary for speculation.