Introduction
It is important for wineries to identify those financial stimulators of fine wines as it helps them
with several compelling advantages. It seems having fine wine can help individuals to manage
portfolio risk.
Discussion
It has been observed that the price of fine wine started to increase through the roof where normal people lost the chance to buy fine wines. In accordance with Knight Frank’s latest Wealth report, the value of fine wine is continuously increasing where it went up to approx. 13% in 2020 and appreciated by approx. 127% over from the past decade (Theweek, 2022). There are many
reasons, for which the price for fine wine starts to increase where it also depends on market
fluctuations which mean the bottle of wine is also important as a barrel of oil and the cost of
these can vary week to week and month to month.
Due to global pandemics, the disposable income of rich peoples is stimulated by stimulating the
fine wine industry. The value of wine depends on several factors including harvest yields,
weather patterns and consumer trends which can also change the demand and supply of their
products. For this reason, wine is considered a traditional portfolio where it is helpful to invest
in. Moreover, it seems fine wine is also considered as a tangible asset where it acts as a popular
hedge against inflation (Fanasch and Frick, 2020). Thus, it can be said through investing in wines
it helps to deliver positive returns and perform a good consumer price index as these different
properties stimulate the price of fine wine.
Conclusion
As a consequence, it can be said that it will be great to invest on fine wines as the prices for fine
wines continuously increase with time where due to increased oil prices glass suppliers and
winemakers are also forced to increase their prices for fine wines.
References:
Theweek, (2022). [online] Theweek.co.uk. Available at: <https://www.theweek.co.uk/arts-
life/food-drink/955612/making-money-investing-in-fine-wine> [Accessed 15 July 2022].
Fanasch, P. and Frick, B., (2020). The value of signals: Do self-declaration and certification
generate price premiums for organic and biodynamic wines?. Journal of cleaner
production, 249, p.119415.