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Champagne, the next target of investors

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As the prices of Bordeaux and Burgundy become prohibitive, investors should look a little further north.

Investors looking for an affordable first investment in wine should consider champagne rather than Bordeaux or Burgundy, according to a London trader.Sebastian Woolf, the founder of Woolf Sung, explains that vintage champagne currently presents the best value for money in the wine investment market. A rise of 10 TP3T is expected in the next 12 months.

According to him, “the best vintages of champagne, namely 1988, 1996 and 2002, have always had great success and have seen a constant increase in recent years. In the 24 months leading up to August 2014, these vintages increased overall by 10.2 %”.
As the investment market seeks alternatives to increasingly overpriced Bordeaux and Burgundy, vintage champagne has the advantage of being produced in limited quantities, distributed globally and benefiting from great prestige. According to Liv-ex, the champagne index increased by 11.9 % between 2011 and 2013 and its market share increased from 1 to 2.3 %.
Champagne is relatively affordable compared to Bordeaux or Burgundy of equivalent quality. The average price of a case of a good vintage of champagne is 2,500 $ (€1,875), while the Bordeaux Premiers Grands Crus or the Domaine de la Romanée-Conti are approaching 10,000 and 165,000 $ respectively ( €7,500 and €124,000).
“Champagne offers good value for money for seasonal investors who want to diversify their portfolio and is a loss leader for those new to wine investing,” says Sebastian Woolf.
“[It] is put on the market when it is deemed ready to be tasted and thus spends relatively little time in the cellar. Vintages are therefore rare and prices are rising. »
He explains that Woolf Sung specializes in finding and selling these old and rare vintages; investments over 3 to 5 years. The number of these bottles decreases as they are drunk and therefore their price increases.
“We especially recommend the Pommery Brut Cuvée Louise Millésime 1999, the Salon Blanc de Blancs Le Mesnil Cuvée “S” 2002, the Dom Pérignon Rosé 2002 as well as the Louis Roederer Cristal Brut 2006. A case of six bottles of Salon 2002 is currently worth 2 750 $ (2,000 €), ie a low investment threshold, and we predict an increase of 10 % in the next 12 months. »
The champagne market is rapidly expanding beyond the most well-known names, he added. As Asian markets deepen their education in fine wines and seek ever greater prestige, the appeal of champagne will expand eastward.
“Thanks to its restricted production and rising consumption in developing markets, the returns on investment in champagne will remain strong and likely increase. We focus our efforts on finding rare bottles for our customers. They are almost impossible to buy from the champagne houses directly, and they are rarely found in perfect condition. With the growing interest in champagne, these bottles will be more sought after and their value will therefore inevitably increase. »

14th August 2014


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