The Marketplace
There’s no denying that wine is a fascinating product. It is an aspirational, luxury item, yet it also has a great reputation for enhancing everyday social interaction. Demand for luxury items continues largely unabated despite global economic fluctuations, and there is great status to be derived from owning wine from certain iconic and revered producers, such as Australia’s very own Penfolds Grange and France’s Lafite Rothschild’s.
Pockets of wealth in markets around the world and interest in respected producers and vintages (the current surge in interest from the Far East for example), creates a seemingly endless circle of global intrigue and therefore potential profitability where the finest wine is concerned.
Market penetration is vital. In terms of Australian exports, the Australian Wine and Brandy Corporation (AWBC) recently identified three key developing markets for growth - China, Russia and South Korea.
Fast facts from the AWBC ...
In June 2007, China became the top export destination for Australian bottled wine in Asia, and the AWBC forecasts that this demand will continue to grow, with the estimated total market size reaching to just over 1 billion litres by 2011/12.
According to research by the Associated Chambers of Commerce and Industry of India (Assocham), the Indian domestic wine market is set to double in size in the next two years (to 2010).
In the Far East, the recent elimination of the duties imposed on alcohol and growing domestic demand in Hong Kong, has seen fine wine merchants flocking to the region.
Meanwhile let’s not forget the abundance of new wine lovers and potential buyers - as the world wakes up to its senses and greater quantities of wine from new producers become available, so our olfactory senses become more sophisticated and we all yearn to tickle our tastebuds with more than just quaffing wine.
Like any other asset class, it is prudent to make investments in wine with a long-term view. All investments are subject to the resilience and cycles of the markets. Fluctuation in the financial markets has a knock-on effect on the worldwide currency markets, which in turn shape the wine markets. The general tightening of belts around the world in times of turmoil begets a little caution as a rule, but again the secret is in diversification – top-end French wines at auction are still exceeding their value at sale.
However, markets remain cyclical, and the growth of global interest in fine wine is ongoing. The mounting interest from the Far Eastern market is also shifting the balance. Wine writers and connoisseurs around the world are recognising the potential there, and the recent waiving of tax and duties on alcohol in Hong Kong and Macau further widens the possibility for profit in trade.
In the Financial Times’ Wine Investment special report in May 2008, Jancis Robinson notes the importance of Hong Kong as ‘the gateway to the quantitatively all-important market of mainland China’ and the region’s eagerness to ‘establish [itself] as a fine wine hub’.
Because we realise the importance of your wine collection, it is our hope to offer you the best possible service through Cellar Link’s new global collection management system.
staying ahead of the market trends
So we have seen how diversifying your wine collection becomes all the more important in terms of your return on investment (ROI). Recognising the need to tap into global markets to seek the best value for your wines, we are in the midst of exciting plans to build Cellar Link operations in key locations worldwide such as California and London. This will offer collectors greater varieties of stock and ready access to buyers worldwide.
keeping a close eye on your investments is vital, and your wine collection is no exception
We think we are ahead of the curve here, having teamed up with world-renowned software provider SAGE, to develop Cellar Link’s new global wine management portal, available via subscription.
The online system keeps an inventory of the wines you have bought, whether they are in storage, transit or trade-out. You can log in securely online using your unique password and view your wine collection as you would your online bank account.
getting good advice on your investments is essential
Cellar Link acts as a hub for expertise in fine wine collectors. Not only do we offer our virtual wine investment expert’s advice, you can also use our website as a great source of information for vintages, critics ratings, regional information and winery descriptions. The tasting notes will help you evaluate your wine in terms of its peak drinking window, and the vintage reports and other information will help you spot the best wines in which to invest.
