Fine wine: Speculation in a bottle

Liv-ex MD James Miles, will tell this week’s Wine Industry Conference in Hong Kong why speculation is, and always has been, part of fine wine.

James Miles, MD and co-founder of Liv-ex

“In my experience so many commentators and château-owners find it rather vulgar that wines are speculated in at all,” Miles told the drinks business. “But wine, and particularly Bordeaux, has such a fantastically long history of boom and bust, and speculation, and I’m rather fascinated by the conflict between the creatives and the suits.”

“Wine has been well-recognised as an alternative investment for a long time,” he added. “What’s changed is that the market is much more approachable and transparent than it was. Before the internet and Liv-ex turned up, it wasn’t easy to track the price of Haut-Brion 2005.”

He feels most investors are drawn in by a passion for wine, “but the money side is part of the fun as with art. People don’t spend £20 million on a Picasso just because they like the painting. They also see it as a way of parking their wealth.”

Though praising the négociant system as “the most powerful on earth – very efficient and low-cost – what’s not to like?” he was blunt about next year’s Bordeaux campaign. “Something has to give, and that something is price. In 2013 they just about got away with it because it was such a small vintage, but 2014 is going to be a reasonably big. They can’t continue to defy gravity, and if they get this one wrong there will be a disaster on the scale of the 1970s”

However if sensible pricing does return, then “ironically 2014 might be a good time to get back into Bordeaux, as it was in 2008,” said Miles.

‘Speculation is dead. Long live speculation’ – Thursday 6^th November at the Hong Kong International Wine & Spirits Fair