Fine wine prices are surging, driven by an influx of overseas buyers in the wake of uncertainty unleashed by the Brexit vote, according to specialists.

The Liv-ex Fine Wine 100 Index - a leading industry benchmark which represents the price movement of the 100 most sought-after wines - has gained approximately 17% since the UK voted to leave the EU last June, closing at its highest level for five years last month.

The weakening of the pound against the dollar had created strong demand for UK fine wine stocks from overseas buyers, particularly those in Asia, said Tom Gearing, MD of wine acquisition and investment business Cult Wines.

The sudden rush on fine wines from UK retailers was putting pressure on availability and pushing up prices, he added.

Investors viewed fine wines as a “safe haven” from currency uncertainty, because their long-term performance was generally uncorrelated with financial markets, Gearing said.

“In terms of liquidity, the fine wine market also boasts an enviable market position in comparison to other passion assets such as classic cars, fine art and stamps,” he added.

“As the only one of these with a recognised market exchange, thriving international auction market and established secondary market worth over $4bn per annum, it offers sufficient liquidity to investors looking for alternative sources of return.”

Asian buyers had seized on low UK prices to buy popular, well-known brands from regions such as Bordeaux and Burgundy, while high-end collectors had taken the opportunity to “snap up expensive, rare and old bottles of Burgundy and Bordeaux at what is, for them, a very attractive price,” according to Gearing.

However, UK-based customers had also taken the opportunity to pick up stock in the upward market, stressed Jake Dean, fine wine sales director at Berry Bros & Rudd.

With a “large and possibly expensive” en primeur campaign about to begin in Bordeaux, it was possible the market would flatten out over coming months, said Justin Gibbs, sales and marketing director at Liv-ex. “This could put the brakes on. It’s a lot of wine to absorb,” he added.

Topics