What were you doing 10 years ago? I was working in a pretty swish Glasgow restaurant during my university summer break despite having no experience. I had no idea that I would end up writing about wine at that time although I seem to remember consuming plenty of vino after shifts finished.
Liv-ex, the online exchange for fine wine, had its first trade 10 years ago: five cases of 1982 Chateau Gruaud Larose 1982 at £920 per case. The same wine is now trading on the exchange at £2,500 per case, an increase of 171%. If only I had been a wine investor 10 years ago, my bank balance would have been looking rather rosy. Many wines have shown impressive returns over the last ten years, with Lafite Rothschild 1982 leading the field at 1,183% (£3,000 per case to £38,500).
Overall, prices for the Bordeaux First Growths – as measured by the Liv-ex Fine Wine 50 Index – have increased 276% over the period. They’ve kindly put a table together to compare the top wines to share indices and gold. But what about the next 10 years? Can we expect to see these impressive returns continue? Unlikely with the exorbitant prices of the 2009s. There’s been plenty of jumping on the speculation bandwagon, forcing prices higher and higher in the but can it continue? Lafite 1982’s seemingly unstoppable rise from £2613 in late 1999 to £25,000 in 2009 is an increase of 856.9%. In a recent copy of Wine Business International, it calculated that the same case would be worth close to £250,000 in another 10 years’ time. It all seems rather out of control and cannot continue on the steep upward curve that has been experienced after the market slipped in late 2008. Reason should prevail, surely?
Index Close (30/06/10) 1 yr move 10 yr move
Liv-ex 50 344 55% 276%
FTSE 100 4,917 18% -20%
S&P 500 1,031 12% -29%
Nikkei 225 9,408 -6% -46%
Gold (£ per oz) 833 48% 194%
