Investment Wines
Like most investments it's all about supply and demand. The higher the demand and more limited the supply, generally the better the potential return.
Advantages of investing in wine
If you are personally investing in wine there is no Capital Gains Tax (CGT) as wine is a perishable commodity. However, you will be subject to CGT if you are investing as a business.
The price of investment wine is also linked to the current Economic climate but unlike financial markets there is normally a comfort zone, often of a couple of months after the falling financial markets, before it effects the investment wine valuations.
If all goes wrong you can always drink it while with paper shares you have nothing!
Tips in investing in wine
Always buy from a reliable source. There are fakes around so be careful.
If buying in the secondary investment market (after bottling), always check where the wine has come from, how it has been stored and its general condition. Investment wines will be devalued if the wine is out-of-condition. There are many factors that can effect the condition of the wine, for example it hasn’t been correctly stored, the label is damaged, the cork seal is broken, the neck level is unusually low or the wooden case has been opened to name a few.
Follow the top wines in the best vintages and check out what the top critics say. Robert Parker has the most power followed by James Suckling from The Wine Spectator. Jancis Robinson is the most powerful of the Wine Critics on the UK Market. In addition, well known Chateaux eg. Leoville Barton, Lynch Bages are also worth looking at for investment purposes. Don't forget to contact your wine merchant and ask them for their recommendations.
Once you know you would like to get involved in buying En Primeur Investment Wine do register your interest with a few wine merchants. This will put you on the list as a potential purchaser and the information that is sent out by the merchants will give you a good idea on the overall performance of the vintage and individual wines. Be careful, sometimes there's quite a bit of price fluctuation between merchants, it's worth hopping around and doing your research.
Remember when calculating the cost of purchasing, make sure that you ask if there are any extra surcharges, such as bottling charges, transportation from Chateau into Bond and also ensure that their storage charges are reasonable.
Avoid "Garage wines" and "cult wines", they can easily go out of fashion.
Always buy and sell your investment wines "In Bond" as it saves paying UK Tax. In addition, overseas buyers, who are now growing at a rapid rate and often pay more for the top wines, prefer to buy wines "In Bond".
Good luck – and do contact us we are here to help.
