The chart above shows auction prices (per 750ml bottle, inclusive of buyer's premium) of 1990 Petrus in individual lots sold at major auctions houses worldwide over the past five years according to the Wine Price File (see more details on Vinfolio's site).  The relative performance displayed here could be repeated for many other fine wines.  What's going on?  It's simple -- demand has steadily exceeded supply.

What about the future?  The long term trend for fine wine prices is fundamentally upwards because growth in demand is likely to continue to outpace supply. 

Here's my supporting rationale: 

1. Wine has become a luxury good.  Wealthy consumers are increasingly buying it for other reasons than drinking it, including as a sophisticated way of displaying their wealth.
2. Wealthy consumers are less price sensitive when it comes to maintaining their lifestyles and often chase the same status symbols, as pointed out by Robert Frank of the WSJ's Wealth Report in his post, "Inflation soars for the rich."  Check out Forbes' cool interactive chart of its Cost of Living Extremely Well Index.
3. Fine wine is a global market.  Just examine the countries of origin of the top ten bidders at most major wine auctions.  Buyers seek out their chosen wines wherever in the world they may be found.
4. Supply of the best known brands is relatively fixed.  Lafite-Rothschild is simply unable to plant additional acreage to accommodate increased demand.  In Bordeaux and Burgundy at least, this is the norm.
5. Wine import duties are more likely to fall than rise.  What would be the impact on fine wine demand from China's burgeoning multimillionaire class if China were to cut its 50% wine import duty dramatically?  See my earlier post on wine import duties.
6. Wine consumption trends are up.  Per capita wine consumption rose 17% in the U.S. from 2005 to 2006.  The potential for growth in other economies is huge.  E.g., China's per capita consumption rate is only 6%-7% of the U.S.'s.  Also see my post on the Top 10 reasons driving wine's growing popularity.
7. The trend towards wine investment helps fuels prices.  Rising wine prices have attracted interest in wine as an asset class from both individuals and professional investors.  For example, in the UK, several wine investment funds such as The Wine Investment Fund and The Vintage Wine Fund have emerged (both founded in 2003).  These funds acquire and hold large quantities of fine wine which in turn creates greater scarcity and supports higher prices.