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Parker factor gives investment market a lift and promises 'high returns' - analyst report

Published:  14 July, 2015

A US investment analyst has suggested that a recent bounce back in market prices of fine wine has made it an attractive long-term proposition.

Aranca said in a report that "positive investor sentiment" and economic recovery in key markets over the past year had brought prices back into growth after four years in "negative territory".

It said the recent release of Robert Parker's retrospective review of the 2005 Bordeaux vintage had resulted in a further positive move in fine wine indices.

Aranca said: "In June, all major fine wine indices except the Rhone 100 increased on a month-by-month basis.

"The Liv-ex Fine Wine 100 index rose 0.9% month-on-month, 2.3% year-to-date and 3.4% year-on year.

"The year-on-year increase was after consecutive falls in the previous 18 months. There was an increase in the prices of all wines which were supposed to have been underrated initially."

It said that the Parker (pictured above) retrospective, which had given a 100-point rating to a dozen 2005 Bordeaux wines "would lead to a rise in fine wine indices in July".

Aranca suggested that the last few years of depressed prices make it a good time to cash in on the 2014 vintage.

"The 2014 is said to be the best vintage after those of 2009 and 2010.

"However, this did not reflect in wine prices as investor confidence in wines from Bordeaux fell on account of the poor vintages over 2011-2013.

"Investors began looking for fine wine from other regions such as Australia and the US.

"Furthermore, demand from China, a major global consumer, has been declining since 2013 after the Chinese president categorised fine wine gifts as an act of corruption. This also impacted wine prices."

Aranca said it expected global wine sales to see "stable growth with faster expansion in the fine wine segment" and prices expected to rise between 14% and 18% by the end of this year.

It concluded that "fine wine is emerging as an attractive investment alternative for long-term investors based on high returns and low correlation with other asset classes".