Golden bubbles

2014-07-14

The performance of the Wine Owners Champagne Index has been nothing short of stellar - outperforming most other assets over the last 3, 5 and 7 years.

Over the last 12 months, however, the index has stagnated, registering a measly 0.5% growth.

Much was said of Champagne as an investment during the course of 2013. In sharp contrast to other fine wine regions, production quantities tend to be vast, but so is consumption. Analysing the performance of the Champagne market shows that appreciation is entirely driven by the very top vintages. With no stellar vintage such as 1996 or 2002 due for imminent release, we said in the first quarter of 2014 that the vintage Champagne market may drift over the next 1-2 years, though very top back-vintages may well benefit as supply dries up, and Champagne styles suited for long ageing such as Salon may continue to firm.

6 months on, this has indeed proved to be the case, with the top performers over the last 12 months to July 2014 being Jacques Selosse Blanc de Blancs Millésimé 1996 (+40%), Krug Clos de Mesnil Blac de Blancs 1996 (+28%) and Salon Cuveé ’S’ Le Mesmil Blanc de Blancs 1996 (+16.5%). This shows the value of relative scarcity, age and a top vintage - the perfect combination for future returns in a market otherwise dominated by exceptionally high volume production.

The poorest performers over 12 months have been Taittinger Contes de Champagne Blanc de Blancs 1996 (-9%) and 1998 (-28%), along with Dom Perignon 1998 (-11%).