In terms of fine wine, the year just ending looks eerily similar to 1997. It may well prove to be more famous for its dramatic price rises than for the vintage itself.

Wine producers in Europe’s Riesling zones, the Douro valley and the southern Rhône may be enthusiastic about the 2007 vintage currently sitting in their vats but the message from those in the classic fine wine areas of Bordeaux and Burgundy is a much less triumphant “the wines produced by that miserable summer have turned out much better than you might think”.

If temperatures in Europe’s, and even California’s, vineyards were unusually muted, those in salerooms around the world were – just as in 1997 and for similar reasons – red hot. Fine wine prices rose to unprecedented levels in the first two-thirds of the year, falling back a little from these new heights as global markets suffered. It was the September meltdown of the tiger economies that marked the famous 1997 peak in fine wine prices. This year fine wine prices may have peaked a little earlier according to the Liv-Ex 100 index (a market indicator that, significantly, did not even exist in 1997) but they are still 40 per cent up year on year.

Although there have been phenomenal sales in the US, this has been largely because fine wine has come to the attention of so many more potential investors around the world – new buyers coming largely from east rather than west of the major auction houses’ and fine wine traders’ headquarters in London. There are remarkably few countries today which do not have some sort of wine culture, however embryonic, and some new Asian and ex-Soviet high net worth individuals enjoy the drinking as much as the exceptionally healthy financial returns on this particular investment – so far. Much of this wine, however, especially that belonging to the increasing number of wine investment funds (on a recent visit I was told there are at least two in Korea alone, for example) sits deep beneath the ground in the UK simply accruing value. Who will eventually pull those corks? Thanks to the perceived magic of its name in China, Château Lafite prices have soared, suggesting that factors other than scores can move markets nowadays.

Conversely, 2007 may well be the last year that mass market wine prices are quite as low as they have been. The strong euro has brought significant price rises for imported wines in the US and in the internationally significant UK supermarket trade there are signs that suppliers have reached the end of the road in shaving pennies off their prices and swallowing excise duty increases. Meanwhile the retailers themselves are coming under pressure to play a more obviously responsible role in the fight against Britain’s binge drinking culture than advertising cut price booze. They have all, even the Walmart-owned Asda, been taking tentative steps upmarket and it seems ever more likely that they will wean themselves off their addiction to price promotions.

Australia’s shrivelled 2007 crop was down by 27 per cent on the 2006 harvest and is expected to be even smaller in 2008. Like South Americans, Australian exporters have been suffering from unhelpful currency movements, which will presumably only encourage basic wine’s upward price trend in the UK mass market. Severe drought in the areas which traditionally supplied so much cheap wine to the northern hemisphere has encouraged a gear change in Australia’s wine exporting ambitions and capability. The dominant UK supermarket Tesco has been charging £7.49 for Wolf Blass’s plastic bottle of sickly South Eastern Australian Chardonnay while asking only £6.99 for the seriously fine barrel-aged Les Quatres Clochers Chardonnay Réserve 2005 Limoux from the far south of France.

The French fightback is now a reality and can be seen in import figures for both the UK and US. Some of the world’s best wine value at present is in France’s wines currently retailing at under £10 or $20 a bottle. The considerable efforts put into improving vine growing and winemaking among less glamorous producers in Bordeaux and the Loire is now evident not just as an intention but on the shelf. The southern Rhône and Languedoc-Roussillon continue to be great sources of well-priced wine, now white as well as red.

One particularly remarkable current trend whose roots lie in France is the dramatic increase in the number of proponents of biodynamic viticulture. By some accounts as many as 400 prominent wine producers, about half of them French but also in at least a dozen other countries, have to some extent adopted these crazy-sounding techniques which involve following the lunar calendar and burying homeopathic doses of various “dynamised” preparations in cow horns at strategic points in the vineyard. For obvious reasons, many of them keep rather quiet about it but are inspired by what seem to be observable, even if inexplicable, improvements in the quality of the soil, vines and the resulting wine. BD, as it’s called, can inspire almost paranoid hostile reactions in rationalists who tend to suggest that the improvements are due simply to the intimate care of each vine that biodynamics requires rather than any particular Rudolf Steiner-inspired mechanism. Whatever the cause, many biodynamic wines do seem to taste more distinctively vital, even “wild”, than the much larger quantity of wine produced today from organically grown grapes.

Where there’s an organic or biodynamic grape there is usually a complex certification scheme, generally at war with one of its rivals. It is perhaps not surprising then, even if not laudable, that many of those claiming to eschew agrochemicals in the vineyard baulk at proving it. But there is no doubt that the sales of pesticides, herbicides and fungicides to the world’s wine producers must be a fraction today of what they were in the 1970s and even 1980s. Buy cow horn futures.

Investors might also consider buying futures in wooden cases, the sort that an increasing proportion of fine wine, and even some not very fine wine at all, is packaged in. Now that a case of a dozen bottles, the standard measure, can cost four-digit or even five-digit sums, cardboard just won’t cut the mustard – and runs the risk of turning to pulp in the humid storage conditions wine likes so much. Another trend as prices rise is the increasing emergence of the six-bottle case.

But this is far from the only development in wine packaging. The elephant in the room, affecting everything from Australian drought to an increase in bulk shipping to save transport costs, is climate change, as outlined here a couple of months ago. There is increasing pressure on wine producers who routinely put their wines in extra-heavy bodybuilder bottles to make them look more valuable to reconsider this antisocial marketing ploy.

Similar logic may well be used increasingly to justify not just bulk shipping but the likes of cardboard cartons, cans and those plastic bottles, which are non-sustainable and have a dangerously short shelf life but certainly score points for convenience.

The wine business, like every other, is currently in an orgy of introspection and analysis of its ecological balance sheet. Sustainability arguments are helping to bolster the case of natural cork in the ever-fiery battle of the bottle stopper, also described here recently.

It is partly, though by no means exclusively, global warming that has been responsible for the increasing alcohol levels in wine that have been evident everywhere over the past decade or two. Every wine producer I meet claims to be unhappy about this phenomenon but while their grapes’ phenolics – flavour, tannins, colour – obdurately refuse to ripen as fast as fermentable sugar levels rise (not so much of a problem for many BD adherents), they seem to be stuck in a bind.

And perhaps what will become an even more compelling issue associated with climate change in many important wine regions will be an increasing shortage of water, the commodity so necessary to wine production that, as Mark Twain observed, it is not for drinking but fightin’ over.

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