A Safe & Lucrative Investment

- Words: Xanadu Luxury Images: Renato Marques & Reagan M

Prices have increased astronomic­ally in the past year, especially for luxury items like champagne. This is according to the Liv-ex Fine Wine 100 Index, which tracks the prices of the world’s most sought-after wines. Pedro Bento of, an online wine marketplac­e, gives advice on how to make the most of this investment sector.

2021 was a banner year for champagne, but it came at the expense of European wine producers, who were buffeted by a perfect storm of poor climatic conditions that yielded an extremely low grape harvest. In 2021, production was only slightly above the historical­ly small yield of 2017. Volume also fell by 4% compared to 2020 (which was already below average) and was 7% lower than the 20-year average.

In addition to the concerns about production, the effects of the pandemic also delivered the perfect storm of increased buying power from accumulate­d savings coupled with supply constraint­s. This resulted in 2021 setting new records for the secondary wine market with fine wines outperform­ing both the FTSE 100 and gold. Champagne was the most traded region and delivered the highest increased value, which saw champagne prices rising by 30% in the last year.

As the wine market continues to grow and change, collectors are becoming increasing­ly attracted to the champagne sector. Thanks to its scarcity, ageing potential, and unrivalled prestige among sparkling wines, champagne forms a safe and lucrative investment. And whilst resilient demand and supply constraint­s are driving the current rally, the best backvintag­e champagnes should continue to deliver impressive returns.

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