The summer trading lull on fine wine has continued
throughout July, as evidenced by the two main indices slipping slightly, according to
the Wine Investment Fund.

As such, the Liv-ex 100 index of fine wine auction prices fell by -0.45 per cent and
the Liv-ex Investables by -0.36 per cent.

However, the month also saw Poland
make its mark on the fine wine industry, as the promotion body for the top Bordeaux châteaux, the Union des Grands Crus, held its
first ever tasting in Poland.
Although the fund does not expect Polish demand to have significant impact on
prices, the move is considered indicative of how developing economies tend to
discover fine wine.

“This continuous replenishment of demand, when seen in the
context of the fixed supply of these wines diminishing over time through
consumption, remains one of the enduring, fundamental characteristics of fine
wine and accounts for the longevity of interest in this asset class by the
serious investor,” said Andrew della Casa, founder director at TWIF.

Another surprising development was the weak growth for
Lafite and Latour - wines which usually do well in the summer months. Both came
in as the weakest at approximately -1.5 per cent on average across a range of
vintages. Right bank wines proved a better investment, with Pétrus noticeably
up two per cent and Cheval Blanc flat. Amongst other wines Lynch Bages stood
out as a positive performer at two per cent as well.

Looking more broadly at recent economic developments, TWIF
noted signs of a pick-up in inflation which has been expected for some time.
Japanese inflation hit its highest level since 2008 and, in the UK, its highest
for more than a year.

“This has to be good news for assets such as fine wine
which, being a physical asset, will always have an intrinsic value and
therefore be a natural hedge against inflation,” said Andrew della Casa, founding director, TWIF.

As such, the fund continues to recommend investors to buy
fine wine, with an outlook of 10-12 per cent returns on long term investments.