SUPPLY & DEMAND


Supply and demand is perhaps one of the most fundamental concepts of economics and it is the backbone of a market economy. Demand refers to how much (quantity) of a product or service is desired by buyers.

The quantity demanded is the amount of a product people are willing to buy at a certain price; the relationship between price and quantity demanded is known as the demand relationship. Supply represents how much the market can offer.

The quantity supplied refers to the amount of a certain good producers are willing to supply when receiving a certain price. The correlation between price and how much of a good or service is supplied to the market is known as the supply relationship. Price, therefore, is a reflection of supply and demand.

Fine wine investment is an improving asset, because of the combination of a winery producing a limited quantity each vintage and the consumption of it as it ages, thus making it increasingly rare and causing prices to increase with demand.

"While it is hard to find totally accurate records and therefore data, it is fair to say that the prices for the very best wines have risen by an average 15 per cent a year over the past 25 years," suggests Joss Fowler, a fine wine manager at wine merchants Berry Bros & Rudd. "That includes quiet periods – for example, from 1998 to 2002 – being more than balanced out by the busy ones, like 2005-07."

Lafite Rothschild 2009
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Lafite Rothschild 2008
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Pétrus 2009
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