Is wine still a good financial investment, and is it prudent to trade it online?

(SCMP) - The recent implosion of several British wine funds (Sanderson Forbes, The London Vines and Vinance) and the entry of Bordeaux Fine Wines into provisional liquidation is not promising news for anyone considering wine as an investment.

Those failures come at a time when there is greater interest in wine investment, as shown by the popularity of online wine exchanges. Berry Bros & Rudd's Broking Exchange (BBX) has been trading wine since 2010, while Bordeaux Index's Live Trade has been making a name for itself since 2009.

They have been joined by newcomer WineWorld Exchange from merchant and storage house Wine World. Are these platforms more likely to bring a fruitful return?

There are a few fundamentals to consider first. This story focuses on Bordeaux - its lifespan is 20 to 30 years, with each phase of its life affecting its quality and so its value.

Most digital broking platforms permit trade on mid-to-full maturity bottles but not en primeur or futures (the youngest Bordeaux, still in the barrel). Futures take around two years to be released to the customers' custody.

"Because en primeur is not a physical product yet, it's sold on a merchant level, not online trading level," says Mariana Lam, founder of Wineworld Exchange. BBX also does not allow trading of futures (although it will start this year).

The market is in a downturn. A case of Lafite Rothchild 2009 would have collected around £11,000 (HK$142,000) in 2011; one recently sold on Liv-Ex exchange for £6,600, according to a report by Bloomberg.

Many claim the market is still sobering up from the unsustainable peaks of 2009 and 2010 vintages buoyed by critics such as Robert Parker, who awarded wines from those vintages near perfect scores.

Financier Julian Skeels is a fan of online trading; a prolific wine trader, he has sold more than US$10 million worth of wine, mostly through these channels.