Specialty champagnes like Dom Pérignon 2008 and Krug 2000 have soared prices this year, outpacing global equities, with wealthy investors looking for returns in previously despised asset classes.
Champagne prices increased 33.7% in the first 11 months of the year, as measured by the Liv-ex’s Champagne 50 index, its best annual performance. This compares to the All World FTSE stock index gain of about 15% for the year so far. More than half of the champagne index’s gains this year came during a big rally in October and November.
“It was remarkable,” said Justin Gibbs, co-founder of Liv-ex, an online wine exchange. “The market is accelerating.”
“Champagne has historically served as an annuity. It never had the best performance, it always went up 8% to 10% a year.”
“Vintage” champagne has been a relatively slow investment in the fine wine market for years. The wines are matured by the champagne producers and offered ready for consumption. Due to their traditional role as a celebration drink, they are often consumed a few years after release.
This has created a regular pattern of supply and, with reasonably constant demand, uninteresting price changes, unlike the high-class wines of Bordeaux or Bourgogne, which are usually kept for years and have developed secondary markets.
But increased demand and tight supply this year have combined to push up champagne prices. Demand was spurred by increased interest among investors and traditional wine consumers, helped by the increase in artisanal producers, who grow the grapes and manufacture the drink.
The recent arrival on the market of the 2008 Special Vintage and the 2012 “Exceptional” has attracted interest from buyers, according to Justin Knock, Director of Wine at the Oeno Group. Demand has also grown steadily in the United States, where many wine buyers took large profits from their stock portfolios during the coronavirus pandemic.
The offer, meanwhile, was restricted. The champagne merchants association’s decision last year to cut production during the pandemic, followed by a poor harvest this year because of frost and fungus, has meant lower production, which could lead wineries to retain more of the crop. your stock of older vintages.
Among the most sought after brands this year is Salon 2002, whose price increased 80%, to 10 thousand pounds sterling (R$ 75.5 thousand) for 12 bottles, according to Liv-ex. Louis Roederer’s Cristal Rose 2008 rose 60%, Dom Pérignon 2008, 46% and Krug 2000 jumped 62%.
Despite its reputation for high price, “vintage” champagne has also benefited from the hunt for good deals by wine investors, according to industry sources. An extremely rare bottle of Perrier Jouët 1874 sold for nearly £43,000 (£32K) at auction at Christie’s this month, but most vintage champagnes cost a fraction of the price of a high-end Bordeaux or Bourgogne, making it -attractive for wine investors looking to diversify.
Tom Gearing, chief executive of Cult Wines, with an investment of 300 million pounds (£2.26 billion), said that champagne once served as a “fantastic long-term protection” for customers’ wine portfolios, because it behaved differently from other wine regions.
For the past two years, Gearing, who was once a finalist on the British version of The Apprentice, has been increasing the proportion he advises customers to stick to champagne, recommending wines like Taittinger’s Comtes de Champagne and Dom Pérignon. But as buyers enter the market and champagne houses hold back, it’s harder and harder to get vintages to buy.
“We love champagne as a region,” he said. “The problem is always getting enough wine.”
Translated by Luiz Roberto M. Gonçalves
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