Vintage Champagne has been an investment that has performed well in recent years; with production and therefore supply restricted, it is a finite commodity – once drunk, a bottle cannot be replaced. With such a strong consumption market (nightclubs, restaurants, hotels, the retail industry), vintage Champagne leftover in the market is limited, typically going to private collectors. Bought within a few years of initial release, the investment avails in the future, when the collector either pays considerably less to drink it, or might be able to sell it for a profit.
In recent history, Champagne has witnessed a staggering increase in popularity, with demand rising from 50 million bottles in the 1970's to an astounding 300 million bottles today. Thus, the already limited supply is therefore dwindling, houses cannot increase their output to meet this demand, and consumer awareness of Champagne as an investment is also growing. Furthermore, with prices for top Bordeaux and Burgundy wines becoming prohibitive and the market volatile, vintage Champagne offers relative affordability and reliability in comparison. The average price of a case of vintage Champagne is £1,500 compared to £4,000/case for one of the First Growths (Bordeaux) and £22,000/case for DRC's Burgundy. (Source Liv-ex)
Champagne therefore offers first time investors a lower entry point, and seasoned investors value for money when expanding their portfolios.
The London International Vintners Exchange (Liv-ex) is a leading fine wine 'members only' exchange for merchants, brokers and négociants. Collecting thousands of prices on a daily basis from its member merchants and the wider wine world, Liv-ex possesses the world's largest and most current standardized database of fine wine prices; we use their figures due to their neutral market position.
Liv-ex's Champagne 50 Index shows the excellent performance of vintage Champagne in recent years, steadily outperforming the Burgundy 150 and Bordeaux 500 indices. Between January 2005 and January 2015, the Champagne 50 has experienced a 137% Mid Price increase:
Value is continuing to rise, as Liv-ex reported that the Champagne index increased 11.9% between 2011 and 2013 alone and its share of trade more than doubled, from 1% to 2.3%. Furthermore, vintage Champagne's already consistent returns are likely to increase, as the market expands beyond the traditional favourites, and as the Asian market continues to increase their education in fine wine, Champagne's interest will likely broaden in the East.
Champagne Houses and Vintages
The Liv-ex Champagne 50 Index comprises the following leading prestige cuvées:
|Bollinger, Grande Annee||Philipponnat, Clos Goisses|
|Krug, Brut||Pol Roger, Sir Winston Churchill|
|Louis Roederer, Cristal||Ruinart, Dom Ruinart|
|Louis Roederer, Cristal Rose||Salon, Mesnil|
|Moet & Chandon, Dom Perignon||Taittinger, Comtes Champagne|
|Moet & Chandon, Dom Perignon Rose||Taittinger, Comtes Champagne Rose|
These wines form the foundation of investing in Champagne and have consistently shown great appreciation and growth over the years. The importance of vintage can also not be overstated, with three top Champagne vintages, 1988, 1996 and 2002 collectively rising 10.2% in the two years leading to August 2014.
Interestingly, vintage Champagne displays a premium, considerably increasing in value as it ages, signaling that younger vintages will reach the equivalent price of similar quality older vintages with age. Take Dom Pérignon for example (which makes up 28% of the Champagne Index): the 2002 vintage is currently valued at £1,080 whilst the similarly rated 1996 vintage is valued at £1,700 – 57.4% more.
|Dom Perignon POP scores by vintage|
|Vintage||Av case price||WA Score||POP|
As new markets and recent rapid global wealth elevation stretch production and supply of these leading Champagnes, prices over the next five to ten years look likely to rise even further.
Storage for Investment
With an estimated £1.5 billion of wine stored in its bonded warehouses, the UK is one of the largest centres of fine wine in the world. As our Champagnes are purchased direct from producers, provenance can be guaranteed, thus increasing the efficiency of sales. Further, as wine stored 'under bond' is not subject to duty or VAT either on purchase or resale (only when released for consumption), bonded warehouses are the principal storage option for investment wine.
All wines stored with The Finest Bubble are held at Vinothéque, one of the foremost storage warehouses in the country. Idyllic storage conditions and state of the art climate control technology ensure collectors can age their wine in perfect conditions with absolute confidence of safekeeping. Moreover, the wines are stored at full replacement value, with storage and insurance charged at £11.00 per 9 litre case per annum inclusive of taxes. Once purchased, cases are stored under the sole ownership of the customer.
Wine Valuation & Selling
Customers who purchase from The Finest Bubble and cellar with us will have access to independent valuation data from Liv-ex for Champagne held in their reserves through an online personal account. When you come to sell your Champagne, The Finest Bubble may make an offer to buy depending on market conditions, however you are not tied to selling through us. If you need us to assist in selling the champagne we can do this for a 4% charge. There are no costs for providing this valuation information.
Champagne is regarded as a 'wasting chattel' (an asset with a predictable life of 50 years or less) and under certain conditions is exempt from capital gains tax; this is not tax advice and we strongly recommend potential investors take independent financial advice before investing. In addition wine stored in government bonded warehouses is not subject to VAT or duty. Most Champagne bought as an investment is bought and stored under-bond and can later be sold under-bond. VAT and duty is only payable at a time the champagne is brought out of bond.
We have presented information that shows the historical case for Champagne as an investment and any forward looking statements are forecasts and not guarantees. Since the value of any investment can go down as well as up we recommend you consult with an accredited financial expert before making investment decisions.
We are able to help you with our opinion on what champagnes and which vintages we believe offer the right qualities to consider cellaring for 5-10 years and help with up to the minute market data showing valuations, trends and transaction quantity for every champagne. We are not able to offer financial advice or advice on investments.
To discuss this further please contact Nick or Chris 020 7359 1608 or email us via the contact page.Last Updated: 27th February 2015