BWC Management & Consulting report investment in Fine Wine increased 10% globally and by 40% in Asia

In October 2009 the Chinese began their dominance of fine wine trading with a six-day display of financial muscle flexing in Hong Kong at a series of Sotheby’s auctions, in which a single litre bottle of Chateau Petrus was sold for £58,000, far exceeding its estimate. This lead many key industry figures to suggest that China would soon emerge as the global capital for the trading of fine wine. This is almost the reality today but the Chinese are no longer buying solely for consumption and gifting but also for laying down for investment purposes.

Investment in fine wine in 2012 increased 10% globally and by a massive 40% in Asia. A recent Chinese Millionaire Wealth Report, published by The Hurun Report, an annual report of the wealthiest individuals in China, suggests that the Chinese mentality has swung in the direction of investment instead of purchasing wine solely for consumption. The publication is a monthly magazine best known for its “China Rich List”. It includes a vast amount of statistical information about how private wealth in China is growing at an unimaginably fast rate and how these individuals are choosing to invest their money and, most relevantly to wine, how they are choosing to “gift”. Interestingly, as the report points out “the gifts which is most commonly given to wealthy Chinese men are watches, followed by red wine”. Perhaps more interestingly is the fact that Lafite Rothschild is the only wine brand in the top 15 preferred brands for gifting by male millionaires, coming in at No. 10 before Armani and Prada.

‘The Chinese have now realised the investment potential in the market and many are looking at the volatility of stocks and shares and whispering; why not invest in something that not only holds value but more often than not appreciates consistently each year’, explains Samuel Cheung, Senior Private Client Portfolio Manager at BWC Management & Consulting.

There is no doubt that the wine market in China is flourishing way beyond any industry expert’s expectations. China is now the fifth-largest consumer of wine in the world and more importantly, it has surpassed the UK and Germany as the largest importer of Bordeaux wine, according to the CIVA Bordeaux Wine Council.

The demand for fine wine is most certainly on an upswing in China but more surprisingly, they are buying for multiple reasons and investment is definitely one.