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Financial market stimulators of fine wine prices

Updated: Jul 7, 2023


Grapes in the net

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.

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