Fine wines beat stock market with 39% gains
Fine wine has beaten the FTSE 100 this year in investment terms as the value of bottles from Bordeaux clocked up gains of more than 90 per cent in the past 12 months.
The index of the top 100 wines on the London international vintners exchange, an electronic market for fine wine, has gained 39 per cent between January and Dec-ember, outperforming the FTSE 100, which has risen by 3.4 per cent, and gold, which has seen its value swell by 23 per cent since the start of the year.
Barrels of oil, which were almost 47 per cent more expensive this month than in January, rolled up just ahead of the vintages, while the S&P 500, which has gained only 4.4 per cent, and the Nikkei index, which has lost 9 per cent, fell by the wayside in the list of the year's best investments.
Cases of 2000 Lafite Rothschild, from the venerable Chteau Lafite Rothschild in the north-western Mdoc region of Bordeaux, sat at the top of the pile sets of 12 bottles, which cost £4,775 last year, sold for £9,100 last month. Owners of the 2003 or the 1982 vintage need not lose heart, as their investments rose in value by more than 76 per cent in the past 12 months. The 1986, 1996 and 1998 vintages made up the rest of the Chteau Lafite squad in the list of the top 10 wines by performance.
Beyond the Rothschild stable, bottles of 2003 Montrose, which cost less than £1,000 last year, added almost 64 per cent, selling for £1,540 in November, while bottles of 2003 Margaux, also from Bordeaux, cost £5,225 last month compared with £3,325 in December 2006.
James Miles, a director of the exchange, said that rising demand from Russia, China and India, where newly minted investors are turning to the rarest vintages to whet their appetite for luxury, kept the market busy. " Wine is more posh than whisky or vodka," he said, "A good vintage is a very important part of a rich man's portfolio. And the number of rich people is growing at the same time as some of the biggest vineyards cut production, pushing prices up for the rarest bottles." He added: " Fine wine is also limited by nat-ure, so when there is an increase in demand the prices rise fast. People drink wine, so it's not like a painting, which will always be available. You can see inflation immediately, without having to wait for years."
Mr Miles said that the 2005 vintage would be the "biggest theme for 2008 ".
Master sommelier Grard Basset, the owner of Hotel Terravina in the New Forest, noted: "It's not an easy investment. You really need to know your vintages, and very few people do know them that well. You also have to be fast get the wine as soon as possible, before buying and selling in the markets makes it too expensive."
He added: "It's also a bit of a gamble sometimes, unless you stick to the ones that always do well, like some wines from Bordeaux, Burgundy and California. But you could diversify and try some of the new wines from Spain and Italy."