Latest Bordeaux vintage set to break all records
2005 is set to be a record-breaking year for Bordeaux with prices for the latest vintage predicted to rise by 77% compared to 2004, according to the latest predictions from the London International Vintners Exchange’s (Liv-ex) annual survey on Bordeaux.
Members of the exchange, which is made up of professional wine traders and merchants, were asked to score the vintage out of 100 points. The average score given was 95+, the highest in the survey’s five-year history. Chateaux Margaux was voted the wine of the vintage.
James Miles, founding director of Liv-ex, says, "From an investment perspective, Bordeaux remains the blue chip commodity. The index is 71% weighted towards Bordeaux, which is the most liquid and transparent fine wine market."
Interest in fine wine investment appears to be growing among investors, who are starting to view wine as an alternative asset class that has a small but important role to play in a well-balanced investment portfolio. Miles adds, "Last year, the Liv-ex 100 index outperformed the FTSE 100, UK Gilts, Wall Street and the FT House Price Index. It has risen more than 11% so far this year."
The fine wine market is based on a fundamental demand/supply imbalance. There is only a limited amount of fine wine in the world, due to lower yields from non-expandable acreage, but the number of high-net-worth-individuals with significant investable wealth is increasing, particularly in the Far East and in Russia, where investing in fine wine has become a status symbol.
But industry experts have been warning investors not to get too carried away by paying over the odds for 2005 Bordeaux wines and have urged them to bear in mind the prices each chateau is currently achieving for its mature vintages.