Wine investment
Wine has gained much popularity as an investment item in recent years. It has been shown to offer low risk and high returns as compared to other investments like real estate. Wines have a steady appreciation rate, and unlike other forms of goods, do not have taxes imposed on them.
Fine wines are rare and sought after by increasing numbers of high networth collectors. This increase in demand coupled with the small supply of wines creates pushes investment-grade wine prices up.
En Primeur
En Primeur , or “wine futures”, refers to the early purchasing of wines. In En Primeur wines are bought while they are still in barrels and before they are sold to consumers. Payment is made before the wine goes out on the market. The advantage of buying this way is that the wines are cheaper during the En Primeur period than they are when released. This method is known to be particularly beneficial for wines produced in small quantities.
This system has proven benefits for both parties. Wines bought en premieur come at a lower price than those sold on the market.. Also, wines are priced lower by premium resellers than the wine companies themselves. This way the consumer or investor makes a saving.
Investment guidelines
- Only buy wines from reputable companies
- Only buy wines that have been given 90 points or above by Robert Parker. Robert Parker is the foremost authority on fine and vintage wines
- Purchase wines “in-bond”, so that duty will not be imposed on them. Buy in an Original Wooden Case (OWC), so that your wines can be traded internationally and will be worth more
- Bordeaux wines make up most of the investment wine market as they have the highest resale values
- Try to avoid New World Wines (eg. America, Australia, New Zealnd). These wines do not have a strong global demand and are therefore high-risk. Also they do not have much aging potential and their vineyards do not have limited access unlike Bordeaux vineyards
- Store your wines in a temperature and humidity controlled 3rd party warehouse. Have your wines insured at full replacement value
