As an investment choice, wine has the exceptional appeal that if you fail to make a healthy profit, you still have an asset to drown your sorrows.

But if you can resist the temptation to pop the cork then there are potent returns to be made, with the price of some bottles up 7.6 per cent this year already.

Before taking the plunge, it's important to do your research.

Over the past 12 months the Liv-ex 100 – an index of the 100 most sought-after wines in the world – has risen by a modest 1.5 per cent. 

This follows a slump and threats of US tariffs on top European wines. The index has fallen 4.8 per cent in five years.

However, Sophia Gilmour, market analyst at Liv-ex, says: 'The wine market seems finally to be coming out of a downturn and buyers are seeing more value in their purchases. 

'Although we are unlikely to see a bull run in the near future, there are individual wines whose prices look to be moving upwards and could be worth exploring.'

She points to top performers in the past year, including a 2021 Bordeaux, Chateau Lafite Rothschild, which is up 7.6 per cent to £473 for a 750ml bottle, according to data from Liv-ex and prices from website Wine-Searcher.

Another riser has been the Italian 2019 Giacomo Conterno Barolo Monfortino Riserva, which is up 5.3 per cent to £679 a bottle, so a case of 12 is worth £8,148.

The most well-known wine merchants include Farr Vintners, Justerini & Brooks and Berry Bros & Rudd. But the specialist magazine Decanter offers a comprehensive list of hundreds of independent merchants.

Merchants employ specialist wine tasters who tour vineyards all over the world in search of the best investments.

They often buy wine before it is even bottled – a practice known as 'en primeur' – at least a couple of years before it hits the shops. 

These can prove particularly shrewd purchases – if the vintage is a success.

Clarets from the Bordeaux region of France are the driving force behind the investment market – with the five 'first growths' – also known as 'premier crus' – of Lafite Rothschild, Latour, Margaux, Haut-Brion and Mouton Rothschild being the top ranked houses, known as 'chateaux'.

There are also Bordeaux 'super seconds' to consider, including La Mission Haut-Brion and Ducru-Beaucaillou. 

Champagnes, such as Dom Perignon and Krug, are also always in demand among the wealthy, as are the finest quality Italian wines.

Gilmour says: 'Dom Perignon's Plenitude 2 is the top traded vintage champagne in value this year. It began at £3,500 for 12 bottles and is now trading at £4,244.'

This is because it has been 'tightly allocated,' she says, which means they have been hard to get hold of.

The wine label is always crucial and reflects quality of grape, soil and landscape for vineyards. But another magic ingredient is vintage – the year in which the grapes were grown to make wine.

Bottles of wine that have been purchased as an investment are not stored at the back of the cocktail cabinet.

Instead, they must be 'bonded' in a temperature-controlled warehouse, so no VAT or duty is paid on it. 

A merchant might charge £20 a year for a case of 12 bottles to be looked after, and the price includes insurance against loss or damage. 

Top wines are typically stored for at least ten years, during which time their supply on the open market falls as the best vintages are more popular and therefore get drunk. As long as demand is maintained or increases, prices should rise.

As wine is deemed to be a 'wasting asset' by HM Revenue & Customs, the bottles also escape capital gains tax.

When it is time to sell, most investors sell the wine back to the merchant they bought them from in the first place.

You must typically pay 10 per cent in commission.

Be aware that wine investments should be treated with caution as it is an unregulated market and not protected by the Financial Services Compensation Scheme.

Alex Marton, who runs Alex Marton Fine Wines in Ealing, west London, says: 'It is essential to do background checks on any wine merchant you intend to deal with and be able to talk to them – not just deal through a website.'

He cautions that if a 'dealer' contacts you promising huge returns every year from investing in wine, be very wary of a scam – and that it is probably best to ignore them.