The champagne market is fizzing. Investment returns from buying the best French sparkling wine – if you resist the temptation to pop the cork – have beaten those from the stock market over the past decade.
The top 50 champagnes have risen on average 85 per cent over the past ten years.
Over the same period, the FTSE 100 Index – which measures the performance of the 100 largest companies on the London Stock Market – rose just 65 per cent. Even in the past year alone some cases of champagne have risen 30 per cent in value
Over the past decade, the best performing champagnes have come from small producer Salon, whose best vintages have increased in value by 163 per cent.
Others that have done well include Philipponnat, Dom Perignon and Krug – rising by 63, 61 and 60 per cent, respectively. The prices for vintage Cristal have increased 40 per cent.
When Dom Perignon 2008 was released last month at £1,200 for a crate of 12 standard 75-centilitre bottles, investors pounced. Within a day prices had risen 16 per cent with wine lovers paying £1,400.
Other vintages that have recently enjoyed impressive returns include Louis Roederer’s Cristal 2005, rising 30 per cent in value in the past year, with a crate now changing hands for almost £1,500.
To benefit from all the tax breaks available to wine investors, you will have to accept that you will never see the champagne.
The wine will be ‘bonded’ by the merchant and remain in a temperature- controlled warehouse.
Such bonding means no VAT or duty have to be paid. The cost of having a crate of 12 bottles bonded is usually between £10 and £20 a year. This includes insurance against loss or damage.
Champagne vintages are often released ten years after they have been harvested – so this year you should look out for 2009 vintages.
But you may have to keep it stored ‘in bond’ for several years – perhaps a decade or so – for supply to fall sufficiently for you to make a very decent investment return.