Fine wine news

The dip in fine wine trading seen in the second half of 2011 was in a sense healthy, according to one drinks specialist.

Richard Brierley, head of fine wine at Vanquish Wine, told FT Advisor that when the Liv-ex Fine Wine 100 index fell by 21.5 per cent, it removed from the market people who were speculating about Chinese demand.

It could also lead to less wine being consumed and diminishing supply, which had led to growing demand.

He explained: "It is healthy in the sense that it is a rebalancing, it's a readjustment, and it takes us back to the fundamentals of how good is the wine, how good is the vintage, is it ready to consume now, is it being consumed, and what is the supply like left in the marketplace."

The news provider examined the pros and cons of fine wine investment against traditional stocks and shares and noted that despite the most recent price drops, wine is rarely affected by the larger global market.

Indeed, one analyst at The Wine Investment Fund Chris Smith, told the website that over the medium to long-term, the Liv-ex 100 has provided returns of 66 per cent over five years.

"In times of extreme stress in the financial system wine can become caught up in the 'dash for cash'," he admitted, observing that there have been three significant falls in the past 25 years: in 1998, 2008 and 2011.

"This resilience means that the volatility of wine prices is low," he added, suggesting that historically, wine is 50 per cent less volatile than the FTSE.

However, Mr Brierley stressed to the news provider the importance of seeking advice when choosing what wine to invest in and "talking candidly with someone who is in the market on a daily basis".

The new year has got off to a good start for the wine investment market, with the Liv-ex 100 index increasing by 1.39 per cent at the end of January, the first positive growth for six months.

Posted by Paula Henderson