The
month of November shows stability in the fine wine
market, since the large drop in prices in September
and October. Compared to last year, trade has
increased by 56% with US and European becoming more
active buyers as sterling weakens. Although fine
wine prices continue to slide, buyers remain
outnumbered by sellers. Wine has been purchased
wines at advantageous prices, in some cases the
lowest seen since early 2007.
The economic downturn has been reflected in the
value of the Fine Wine Index shows a 20% below its
all-time peak had reached last summer. Unfortunately
investors have seen the value of their stocks sink
to an 18-month low following the stock market and
bank crisis. Although until October wine had
remained untouched by the economic crisis. Some
classy vintages have lost as much as 25% of their
value in one month alone.
That stocks that have been hit hard include Lafite
Rothschild 2004, which decreased by 28% per cent
from £2,775 per case to £2k, and Chateau Montrose
2003, which dropped 23% from £1,625 to £1,250. A
case of 2000 vintage from Chateau Ausone - ranked
Premier Grand Cru Classe - fell in price from
£15,575 to £12,200, a loss in value of £3,375.
Financial advisers have recommended that fine wine
is one of the best options for making money during
the credit crunch, but experts suggest that the
market will feel the effect of the recession. The
high-end wines have suffered the brunt of the fall,
because in the past they have been the easiest to
sell and made the biggest profits. People are very
cautious during the economic crisis and thought of
having their money invested in wine may not be the
best option for many.
Wines have also been affected by the drop in sales
through restaurants. Many places have been reluctant
to reduce the cost of a bottle despite the economic
downturn. The drop in prices in October has been the
steepest however experts are confident that the
market will recover. Therefore in the long-term fine
wine investment is recommended and will be
profitable. Anyone who bought fine wine at the start
of 2005 would have seen its value double by spring
2007, then a further 25% rise by summer 2008. Buyers
would now benefit from the low prices, which have
made good wines affordable!
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