Fine wine investments pay off over a year of lockdowns with 13% rise in prices

Published On: September 25, 2021Categories: Latest News2.3 min read

The year of lockdowns over the 12 months to the end of June carried mixed fortunes for different collectables but rare wine investments were among those to benefit. Art sales, by contrast, fell significantly due to auction houses being closed for much of the 12-month period. But those conditions don’t seem to have impacted fine wines, with collectors happy to acquire bottles online. Rising demand saw the average selling price of fine wines rise by 13%.

The research was commissioned by property consultants Knight Frank and carried out by wine market analytics company Wine Owners. Nick Martin, the Wine Owners founder, said that prices had increased for especially Bordeaux vintages between the years 1996 and 2000.

These vintages were especially popular as they are at a stage of maturity which means they can either be purchased to be drunk immediately or stored by collectors. Mr Martin commented on a shift from restaurant to home consumption meaning more wine aficionados had been treating themselves:

“There is no doubt that during the pandemic, people consumed at least as much, if not significantly more, alcohol in their homes than they would have done in restaurants — particularly in the winter months.”

Another Bordeaux to jump in price, by 14% over the year in question, was, said Martin, the Mouton Rothschild 2016. It was bought by a combination of wealthy collectors and those planning to drink it in the near term.

Wine merchants are enjoying the benefits with Mr Martin reporting:

“I speak to many wine merchants, particularly dealing with French wines, and they have never been busier. One said to me: ‘It was unbelievable — like five Christmases back to back.’”

But it wasn’t only Bordeaux or French wines that saw their values rise over the period. An Italian Super Tuscan Sassicaia 2015 saw its selling price increase by 14.6% to £2500 for a case of 12. 2008 Dom Pérignon champagne saw its price bumped up to £1680 for a case of a dozen bottles.

A continued rise in the number of Asian collectors buying and investing in fine wines has been another factor driving the rise in values. That, says Martin, is a steady trend “which has gone on for years”, and is expected to continue.

Another category of luxury collectables to be boosted over the last year has been classic cars, with price rises of 4%. Much of that was attributed to specialist banks starting to offer loans for expensive, collectable models. But art and whisky didn’t follow the same trend, with the Knight Frank report showing price drops of 2% and 4%. Why demand for rare whiskies has diverged from that for fine wines is not clear.

The report also covered the “explosion of digital art” that has seen NFT (non-fungible tokens) works grow hugely in popularity. These digital artworks are created and their originality validated on blockchain technology. However, NFTs were not included in the Knight Frank luxury goods index this year as a result of extreme fluctuations in their prices. It can, however, be expected they might be included in future years.

About the Author: Jonathan Adams

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