Anyone invested in fine wine before?

[investortom]

Has anyone had experience investing in fine wine, they seem to have produced some good double digit returns? Any help or advice would be appreciated!

 

[howardbandy]

Hi Tom --

To my thinking invest is not quite the right word. If I make an investment, I call my lawyer and have the details written into my will. If I will probably sell the item before I die, it is a trade. If I will use it up and discard the remains, it is an expense.

My wife and I enjoy wine, drink it regularly, lead a local wine club of about 500 people, have made wine (we had barrels), visit local wineries, know winemakers well, and have several bottles at home. My wife and I have discussed between ourselves and with local wine merchants what to do with any wine left in our collection when we are no longer drinking it.

Merchants buy wine priced in hundreds of dollars and lower at wholesale at prices that are half or less of retail prices, so bottles purchased at retail will not give a positive return when sold.

Collectors want rare wines. Bottles priced in four figures. Trading collectables of any category is fraught with problems -- low liquidity, large bid-ask spread, counterfeiting, etc. Wine has the additional problems of being both variable in quality and perishable. Older might be better, but not always, and often only up to a point. One merchant tells us that the first question he asks of a private wine collection is how it was stored. Temperature fluctuation, or storage temperature above about 58 degrees Fahrenheit (24 Celsius), increases the rate of deterioration, as does vibration and light.

Buy good wine, drink good wine, enjoy good wine, share good wine. It is an expense. Not an investment. Not even a trade.

Best regards,
Howard

 

[investortom]

Hi Tom --

To my thinking invest is not quite the right word. If I make an investment, I call my lawyer and have the details written into my will. If I will probably sell the item before I die, it is a trade. If I will use it up and discard the remains, it is an expense.

My wife and I enjoy wine, drink it regularly, lead a local wine club of about 500 people, have made wine (we had barrels), visit local wineries, know winemakers well, and have several bottles at home. My wife and I have discussed between ourselves and with local wine merchants what to do with any wine left in our collection when we are no longer drinking it.

Merchants buy wine priced in hundreds of dollars and lower at wholesale at prices that are half or less of retail prices, so bottles purchased at retail will not give a positive return when sold.

Collectors want rare wines. Bottles priced in four figures. Trading collectables of any category is fraught with problems -- low liquidity, large bid-ask spread, counterfeiting, etc. Wine has the additional problems of being both variable in quality and perishable. Older might be better, but not always, and often only up to a point. One merchant tells us that the first question he asks of a private wine collection is how it was stored. Temperature fluctuation, or storage temperature above about 58 degrees Fahrenheit (24 Celsius), increases the rate of deterioration, as does vibration and light.

Buy good wine, drink good wine, enjoy good wine, share good wine. It is an expense. Not an investment. Not even a trade.

Best regards,
Howard

Thanks Howard , appreciate your advice. I have heard about people buying wine with a profit in mind. Buying good wines, Grange, Hensche Hill of Grace etc and holding for a number of years before selling, I do see a number of companies specialise in selling wines (Langtons, MW Wine etc) so I don't think I would have a problem selling. Has anyone done this kind of thing before and was it profitable? While I don't want to put my life savings into it, I think it would be a lot of fun and potentially profitable.

 

[Craton]

G'day Tom and welcome to ASF.

I've a mate who's right into wine, let's just say that he's in-the-know and been buying and sometimes selling wines for a long time. Over 30 yrs ago he converted two rooms of his PPOR into a temp. controlled cellar. Stocks wines from floor to ceiling. Amazing to see, eye popping.

If one considers the cost of:

• Learning about wine. Spending hands on time in the field.
• Coverting the two rooms. Strengthening floors, walls.
• Insulation: floor, walls and ceiling
• 2 x reverse cycle thermostatically controlled air cons
• Racking (open and polystrene, etc)
• Security
• Electricity
• ...and the big one: TIME

As I said, old mate is into wines in a big way, knows the makers, regions and specializes in Hunter whites and big Barossa reds, he knows his stuff.

Funny seeing him pour a full bottle down the drain because of cork taint (that's how old a lot of his wines are) or for whatever reason, then calling the winery/wine merchant to advise which of the 5 V's (Vintage, Variety, Vineyard, Vigneron and Volume) went to compost.

So adding up the incomplete list as I'm sure I've left out stress, breakages and the like, is it profitable?

Good question. I've asked him on occasion and his reply is no. He does sell some of his aged wines he doesn't like through the year which buys more stock. One has to weigh up the list factors, especially the time component, and the ROI factors plus I guess the commitment to ageing the wine, if it's a passion am sure like my mate that it would be very rewarding. Drinking an fine aged wine is an exquiste experience I must admit.

Now if you're looking at investments such as: the Great Australian cask offer http://nant.com.au/barrel-offers/ and the like, well that's a different kettle of fish altogether. Case of DYOR.

 

[howardbandy]

58 degrees Fahrenheit (24 Celsius)

Sorry for the typo -- 58oF is about 14oC -- not 24.

 

[burglar]

Winemaker Ben Glaetzer won a big award for his Heartland Shiraz.

A reporter asked if he would raise the price and then shoved a microphone up his nose!

Ben (Cool Dude) said "Nah Mate, I wanna shift the stuff"


Ben (Cool Dude):
http://www.wine-pages.com/features/glaetzer.htm

 

[waimate01]

Depreciates too much upon use.

 

[burglar]

Depreciates too much upon use.

Do you mean after you filter it through your kidneys?

 

[investortom]

Hahaha! I know I won't be investing in Heartland Shiraz then!!! That whiskey investing sounds interesting, though I've never heard of a secondary market, where and when would you sell it? Also I don't like whiskey. At least with wine I know I can sell it via one of the wine auction houses and not have to sell it directly to some pub who will not want to give me full value. Or I can drink it! Anyway, any further advice would be appreciated, I'm sure lots of people are doing and making money. I think my biggest problem will be I will be tempted to drink my investments! I'll need to keep it under lock and key!

 

[eurotrader]

There are quite a few companies in the UK and US that offer fine wine investment but over here there are Cult Wines ( I think they are a branch of a UK company ) they are at
you can also try the auction houses like Langtons or Grays online

Whisky also seems to be popular and a mob down in Tassie are promoting it called Nant.

Do your own research though and if I were you even though alternative investments sound compelling, just like any investment make sure you own whatever you invest in just in case the provider goes belly up

 

[Dona Ferentes]

Fine wine investors have been left with little to toast this year after prices of top-end Burgundies and vintage Champagnes fell sharply as demand from Chinese buyers dried up.

The price of Burgundy dropped 14.4 per cent this year to the end of November, according to wine exchange Liv-ex’s Burgundy 150 index. Vintage Champagne fell 9.8 per cent while a broad index of Bordeaux lost 11.3 per cent.

The falls mark a second consecutive tough year for the fine wine market, which was hit in 2023 by higher interest rates – which make assets without a yield such as wine less attractive to investors – and dwindling demand from Asia, traditionally a major buyer of French red wine.

“It’s been super tough,” said Gregory Swartberg, chief executive of London-based wine investment company Cru Wine. “November was one of the worst months of the year. We’re not out of the woods yet.”

Liv-ex’s overall Fine Wine 100 index is down 9.2 per cent this year to the end of November, while global stocks have risen 20 per cent during the same period.

 

[StockyGuy]

Fine wine investors have been left with little to toast this year after prices of top-end Burgundies and vintage Champagnes fell sharply as demand from Chinese buyers dried up.

The price of Burgundy dropped 14.4 per cent this year to the end of November, according to wine exchange Liv-ex’s Burgundy 150 index. Vintage Champagne fell 9.8 per cent while a broad index of Bordeaux lost 11.3 per cent.

The falls mark a second consecutive tough year for the fine wine market, which was hit in 2023 by higher interest rates – which make assets without a yield such as wine less attractive to investors – and dwindling demand from Asia, traditionally a major buyer of French red wine.

“It’s been super tough,” said Gregory Swartberg, chief executive of London-based wine investment company Cru Wine. “November was one of the worst months of the year. We’re not out of the woods yet.”

Liv-ex’s overall Fine Wine 100 index is down 9.2 per cent this year to the end of November, while global stocks have risen 20 per cent during the same period.

Do I buy the dip? Some people will buy anything just because it's lowering in value lol.

 

[divs4ever]

i bought a couple bottles of cognac , early this year ( about $80 each if memory serves me correctly )

not so much because i think the price will go up ( government excise will guarantee a rising retail price )

but in case those uber-bears are correct and the market finally retraces more than 60% ... and i need some cheering up

 

[Dona Ferentes]

Do I buy the dip? Some people will buy anything just because it's lowering in value lol.

I'd buy the tipple, myself

 

[rcw1]

i bought a couple bottles of cognac , early this year ( about $80 each if memory serves me correctly )

not so much because i think the price will go up ( government excise will guarantee a rising retail price )

but in case those uber-bears are correct and the market finally retraces more than 60% ... and i need some cheering up

rcw1 buys and then drinks it ha ha ha ha

 

[divs4ever]

rcw1 buys and then drinks it ha ha ha ha

will probably drink it , just not in 2024 ( i hope )