Here at Octavian Vaults, we have looked after wines for more than 20 years and now store vintages from over 10,000 collectors investors and wine merchants. We know that successfully investing in fine wine requires preparation and knowledge to ensure that you get the most benefit from your investment. So, we put together some top tips to help you make some successful investment decisions.
Investment in wine is generally a low volatile, stable investment which began to increase exponentially in the 1980’s.
Fine vintages are considered Veblen goods, which means that demand for them increases rather than decreases as the price rises. The most expensive lot of wine ever sold went for £1,035,000 – around £9,800 a bottle. This went under the hammer at a Sotheby’s auction in Hong Kong and was 114 bottles of Romanée-Conti Burgundy.
With the potential for a high return at low risk wine investment is a great alternative to investing in traditional business stocks.
Experts tend to agree that you should have a pot of around £10,000 in order to make wine investment a success, but you do need to acquire the best merchandise in order to make the profits you are looking for. The largest part of the investment market is made of wine from the best estates of the old world regions of Bordeaux, Burgundy, Italian, Rhone and Champagne, and these places typically have the best returns.
Buying investment wine can range by as much as 20% so make sure that you research the best market price before you buy. Also, check the Parker score. Robert Parker Jr is the most influential critic in the world of wine and his score has a direct effect on price, and on market demand.
Most wine isn’t meant to age, so we recommend researching wines that will age well in the cellar. Take a look at Wine Folly’s chart for a list to get you started. We suggest that you invest in wines with a medium to long term view, with 6-10 years usually wielding a substantial return. We highly advise you to wait more than at least five years, and also recommend investing more than 3 bottles of wine.
“Like any investment market prices can vary, but due to the long-term nature of wine investment short-term variations can generally be avoided, and you can benefit from consistent and low volatile returns” Tom Gearing, Cult Wines.
Finally, look after your fine wines when you have purchased them, so that you can guarantee quality before you sell. The best way to do this is to place it in a bonded warehouse, where temperature, humidity and other microclimate factors will be carefully regulated. Your wine will also not be viable for VAT as they will be considered “in transit”.
Also, make sure that you take out insurance at replacement value in your own name, as well as speak to a tax consultant, which will give you that extra security.
As purveyors of professional wine storage, we have the finest wine storage cellars situated in our Wiltshire base. These conditions will ensure that that your product arrives at its destination in an optimal state, and it and will increase the likelihood of future wine deals in the future. Great wine deserves a great home and investing in this sensibly should be at the very heart of your wine investment plan.
For more information about our wine storage cellars, fill in our contact us form or ring us on +44 (0)1225 818714.