Wine Prices Are Now Seeing Enormous Price Inflation Due To China

Rapidly rising Chinese income levels aren’t only pushing up prices for basic foodstuffs globally, they’re also firing up the market for high-end French wines according to The Wall Street Journal.

For one wine, prices have jumped by 25% in just a month:


In early July, Hart Davis Hart Wine Co. began advance sales of Château Lafite Rothschild’s 2009 Bordeaux at $18,000 a case.

Within four days, the Chicago-based retailer and auction house had sold out. But its supplier’s price had risen, and Hart Davis Hart now sells the 12-bottle cases for future delivery at $23,000—about $1,900 a bottle.

For example, orders for Bordeaux wine from Chinese buyers is now 39x what it was during year 2000. This massive demand growth has driven entrepreneurial Hong Kong traders to invest in wine futures with the hope of flipping their wine for a profit to mainland buyers.

That has helped fuel huge prices increases: Lafite Rothschild 1982 has increased in value 14 times over the past 10 years, according to Cult Wines.

Château Smith Haut Lafitte sold 80% of its 2009 Bordeaux within six hours, at double the price of its 2008, Ms. Cathiard says. She forecasts the 2009 vintage will retail around $100 a bottle, compared with $50 to $60 for a typical vintage.

While we understand the allure of the most popular wines, this price inflation will likely support lower-tier wines as well. What starts as a frenzy for the best, can continue to be a long-term appreciation for wine in general.

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