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Wine Investment Market: A Case Study

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C.W.Tsang - Hong Kong's financial secretary, advocated that fine wine "can be both good for the stomach and the bank account".

According to the interview, T. Cheung- a professional in wine industry (personal communication, March 30,2016) said that fine wine takes the leading role in wine investment and red wine takes around 90%, while white wine and champagne together make up around 10%. Only investing on some specific wine can hedge its value in market, as a result of this, those wine intends to be in a very high price range. Top wines in Bordeaux region and some wines in Burgundy are extremely popular in wine investment. Although other regions do make good wines, but the demand for those in global secondary market such as Hong Kong is very limited, so sticking to fine wines with the best quality from Bordeaux is relatively a good strategy in wine investment. In addition to this, fine wines in Burgundy becomes more popular these years comparing to Bordeaux wines, and a few select other fine wine from Italy and Spain can be seen in auction house. American fine wine is not active in global wine investment market and it may only stick to American market. Overall, the old world wines are dominated in the wine investment market.

As for the investors, it is …show more content…

According to the supply and demand curve, ceteris paribus, if the demand increase, there is no doubt that the price will go up. (Table 1) Huge demand for good vintages bottles of wine in top regions (mainly Bordeaux and Burgundy) emerged significantly because big amount of fine wine is purchased and consumed in some fast-developing countries, such as BRIC countries (Brazil, Russia, India and China) In conclusion, the prices in fine wine market are bound to rise a lot. Fine wine consumption in those countries rises sharply and it is even more overwhelming than the developed countries that are traditionally

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