Last week’s UK referendum result boosted fine wine sales to Asia
The fall in sterling after last week’s Brexit vote led to a spike in fine wine sales to Asian buyers.
As the pound dropped to a 31-year low, a global fine wine and spirits merchant BI generated a week’s revenue in six hours on its online trading platform. Sales to Asian buyers jumped eight times higher than the previous day.
“It’s good for the fine wine sector in the short term and they will probably do quite well from it for now because of foreign exchange rates,” Jeremy Cunnington, senior alcoholic drinks analyst at Euromonitor International told City PM
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“However, they could potentially run out of stocks soon, and then the exchange rates will be unfavourable for buying vintages back in. It’s a short-term boost but it isn’t going to do anything more than that.”
Alternative investors have peddled fine wine as a safe haven in volatile post-Brexit vote markets as it tends to perform well when the pound is weaker and boasts a number of defensive characteristics.
For example, holdings in wine are not linked to the prices of other assets in most circumstances, with the long-run correlation between wine prices and the FTSE 100 coming in at just 0.04.