Wine Investment FAQs
Why does fine wine go up in value?
Fine wine matures once bottled, and improves with age. A limited amount is
produced every year so, when bottles are consumed, the supply of the wine
becomes rarer and therefore the price increases, provided there is still a
demand for the wine. While supply dwindles, demand for mature wines can make
early purchases an especially good investment. Moreover, demand and
interest in fine wine is growing around the world and supply of the top wines
cannot be increased
Do I need to know a lot about fine
wine?
You do not need to have much knowledge in the subject, leave that to us!
However, we strongly recommend seeking advice when investing in wine as
not all well-known wines are suitable for investment and so it is possible for
potential investors to put funds into the wrong type of wines. BB&R
has been trading for more than 300 years and we are here to make
recommendations based on our experience within the marketplace.
In a nutshell, what are the advantages of wine over
other investments?
- Finite Product: You are investing in a tangible, improving asset
that has a limited production but a huge global demand base. The supply of this
already limited asset then declines over the years as the wines are
consumed.
- Tangible Asset: Shares that fall in value are good for nothing save
for selling at a loss. Wines that do not perform financially as well as
expected can be enjoyed.
- Tax:Your investment is exempt from duty and VAT and, in theory,
profits are exempt from Capital Gains Tax. Please note that we advise you
to consult a financial institution or an IFA for clarification.
- Perfomance: There is little doubt that wine has performed very favourably amongst the strongest investments over the past few years. Even in times of macro-economic downturn, wine tends to remain more robust than many other investments.
- Investment - It is an investment market like any other, so be aware
that prices can go down as well as up.
-
Unregulated Market - Many unscrupulous merchants/wine investment houses will have few qualms about selling the wrong wines or the right wines at the wrong prices for investment. Only buy from established merchants and ensure you get the expertise needed.
- Investment Term - Short term gains have been possible over the past
two years though your investment should be viewed as a mid to long-term
one. At least five years should be considered the norm, eight to ten
years being better.
- Wine Types - Only specific wines will tend to accrue value, and these wines tend to be expensive. Ensure (through sound advice) that you are buying the right wines at the correct prices.
What sort of wines should I invest
in?
Always speak to an advisor, as they can give you information as to which wines
are performing best on the market at that particular time. As a rule of thumb,
only ever invest in the top wines of Bordeaux and a handful of wines
from Burgundy. Whilst other parts of the world make great wines, the
global secondary market has limited demand for these, so sticking to the best
from Bordeaux is realistically the safest strategy.
I have heard of `en primeur'. What is
this?
En Primeur is the name given to buying wines before they are bottled (i.e. a
future). See our en
primeur page for more details.
What does `en primeur' have to do with
investment?
En Primeur gives the investor the opportunity to buy wines at the earliest
point on their lifecycle, often offering a price advantage over buying the same
wine at a later date.
Without a lot of wine knowledge, where should I
go for advice?
Please contact our Fine Wine team to begin your adventure into wine
investment.
Tel: 44 (0) 1256 340123
Fax: 44 (0) 1256 340149
E-mail: Fine
Wine Department
