A Safe & Lucrative Investment

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 wine.je, 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.