Fine wine prices rose 39% in 2007 according to the Liv-ex 100 index, second only to oil (see Decanter.com story).
Investment returns of this magnitude are high enough to get the attention of even "unintentional" wine investors. There are a variety of reasons causing wine prices to rise (see my September post as well as Eric Asimov's December 5, 2007 story in the New York Times titled "Drink and Be Merry: Wine Prices to Rise").
Rising global demand vs. a weak U.S. dollar
Rising global demand (especially from Asian countries) is the main factor driving wine prices higher. The weak dollar may be contributing partially to what Americans pay for wine from Europe, but the dollar has only depreciated against the Euro by 9.2% in 2007 and a total of 15.2% since January 2004.
P.S. If you'd like to read all my prior posts on wine investing, click here.
