Month: March 2022

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Burgundy | Regional Report

Burgundy Region

There is a maxim in the wine trade: no matter where a wine lover starts, they end up in Burgundy.

A key part of the attraction is in its contradictions: it is the most romantic wine region but also the most expensive; quality tends to be high but quantities are low; intuition is key but it is also one of the most researched regions.

With only two primary grape varieties and three classification ranks, Burgundy may appear simple, but with dozens of controlled places of origin (AOCs), hundreds of producers and thousands of wine labels, it can be incredibly complicated.

Our Burgundy Report delves into the fundamentals of this fascinating region, including the development of its investment market, historic performance, recent expansion and key players.

Discover more about:

  • Burgundy’s price performance
  • The expansion of Burgundy’s investment market
  • History of the Burgundy wine region
  • Burgundy’s structure and fragmentation
  • Key Burgundy producers
  • How we choose Burgundy for investment

Do not hesitate to get in touch and speak to one of our wine investment advisors for further information and to reserve your allocations.

 

 

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Learn

The Fine Wine Market is Seeing More & More Investors

Fine wine bottles in a rack

 

There is no question that appreciation of wine is increasing all over the world which, subsequently, has piqued the interest of potential fine wine investors across the globe.

The fine wine market has established itself as a low-risk marketplace for anyone looking to get into the investment world or wanting to expand their existing portfolio. But why is it so popular?

In this article, discover why more and more people are investing in fine wine and, if you’re considering becoming a fine wine investor yourself, find out how to get started.

Differences between fine wine and other investment methods

 

An alternative investment

An alternative investment is any way of growing your capital that doesn’t fit into the traditional categories, such as equity and bonds.

Alternative investments, such as fine wines, allow investors to diversify their investment portfolios. Doing so decreases the risk over their entire portfolio, giving them the chance to strengthen what they already have.

Low correlation with the stock market

The fine wine market doesn’t correlate with the stock markets because its value relies on the good old-fashioned supply and demand model.

Investment-grade wine producers only make a small amount of wine every year, this already increases its value. As soon as someone drinks that bottle of wine, there is one less bottle to buy, but the demand for that wine doesn’t go away.

This continuous cycle is what often gives fine wine investors such a healthy return on investment, unlike traditional investment methods where prices often rise and fall unexpectedly.

It’s a tangible asset

A tangible asset means it is a physical object. A fine wine investor invests in a real-life, physical product, which means they have direct ownership of that wine and can crack open and enjoy it should they wish to.

This differs to stocks and shares, where although you may receive paper confirmation, you don’t truly own the product – making it less secure than tangible assets.

Low volatility

Volatility is a term to describe the rate prices of an item increase and decrease in a market over a period of time.

Traditional investment methods, like stocks and bonds, have very high volatility. Prices can increase and decrease for any reason at any given time. Indeed, sometimes it only takes one prominent and influential figure to publicly criticise it for its price to dramatically drop.

The fine wine market has low volatility with stable price growth over time, which is why fine wine is considered a low-risk investment.

So, how can you turn fine wine into profit?

One of the many great things about fine wine investment is that you can take it up whether you are an investment expert, or a hobbyist looking to expand your portfolio.

If you are new to fine wine investment and would like some help deciding where to invest your money, you could look into working with a fine wine investment company like WineCap.

Here at WineCap, we offer expert, unbiased advice on strategic investment opportunities and can walk you through how to get the most out of your investment.

We also store your fine wine in government bonded warehouses, ensuring your wines are stored in optimum conditions.

Learn more about wine investment and schedule a free consultation today.

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Investing in Wine Vs. Investing in Stocks – Which is Safer?

Screen showing the stock market figures

If you’re looking for viable investment opportunities then you’ve likely considered a range of potential investments, including stocks and wine. But of these two drastically different investment arenas, which is the safer option during the current economic climate?

In this article, discover the pros and cons of investing in wine and investing in stocks to help you make a more informed decision about which investment direction is best suited to you.

The pros of investing in wine

 

A low-risk investment

Fine wine is a physical asset, so it represents a very low-risk investment. When you invest in the market, your wines are stored in optimal conditions within a secure bonded warehouse.

Wine is a physical, tangible asset

Wine, unlike stocks, is a tangible asset created to be drunk and enjoyed. This gives it intrinsic value as a medium to long-term investment.

A relatively resilient marketplace  

According to S&P Global, wine is one of the few luxury assets to have withstood the harsh impact on assets triggered by the coronavirus pandemic, proving the market relatively resilient. Indeed, wine is widely considered to be a ‘safe haven asset’.

The cons of investing in wine

 

Portfolio valuation can be tricky

Traders tend to purchase and sell wine at a less frequent rate than stocks are purchased and sold, and there is no standardised international market. These factors can make it challenging for wine investors to get an accurate idea of the value behind the wines in their portfolio.

Selecting well-known wines could be disadvantageous

Many wine investors tend to choose mainstream wines from well-known wine regions such as California, Burgundy, or Bordeaux. Owing to their ubiquity, these wines can have a reduced chance of transitioning to rare wine status.

Selling wine can take a while

It can take wine investors some time to sell a bottle of wine in their portfolio, particularly when trying to navigate the marketplace without expert support. This can make it more difficult to access funds quickly should the need arise.

The pros of investing in stocks

 

The potential for large cash gains

Though the prices of individual stocks rise and fall daily, the potential to grow your money over time can be significant. Investing in stable companies that have the ability and intention to grow can often result in profit for investors.

Quick purchases and sales

Thanks to their liquidity, stocks can usually be bought and sold fairly quickly, and often at a fair price.

Diversification

The stock market gives investors the ability to build a diverse stock portfolio across a wide variety of different industries and sectors. This diversity can help to reduce the overall risk of stock investment.

The cons of investing in stocks

 

An erratic, volatile marketplace

Unlike the fine wine market, the stock market is a high-risk, erratic and volatile investment arena. Although stocks can be highly lucrative when invested in tactically and sensibly, the rapid, widespread price fluctuations can make it difficult to achieve the desirable returns on your investments.

Limited company information

It’s important to remember that when you invest in stocks you are investing in a public company. However, investors may not be able to access all relevant information about the company, which can make it more difficult to make good investment decisions.

Capital Gains Tax

If you make a profit on shares you sell, then you will likely have to pay Capital Gains Tax, depending on your total gains for the tax year.

However, it is worth noting that you do not have to pay Capital Gains Tax when you sell fine wine because the HMRC classes it as a ‘wasting asset’.

Wine Vs. stocks – which is the safer investment?

While the stock market represents a high-risk, high reward investment arena, investing in wine tends to offer more security – which is an important consideration if you want to create a sustainable investment portfolio.

Fine wine has a long, proven history of robust returns on investment. According to the world’s largest online wine stock exchange, Liv-ex, fine wine has delivered 13.6% annualized returns over the last 15 years – outperforming most stock markets. One need only review the Liv-ex fine wine indices to see how modest but consistent annual growth adds up over time.

So, in the case of wine vs. stocks, it is our opinion that wine is a much safer investment.

Talk to our wine investment experts

We hope you found this article helpful. If you’d like more information or advice about investing in wine, simply schedule a free 30-minute consultation with one of our wine investment experts.

Schedule your free consultation

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Report

Bordeaux 2020 | Vintage Report

Barrels in a Bordeaux cellar

Our Bordeaux En Primeur 2020 Report is available to download. Discover our wine investment experts thoughts on 2020, a vintage that has widely been heralded by prominent wine critics as excellent and the third in a row of top Bordeaux vintages. Find out which Bordeaux sub-regions and producers they feel delivered top class wines that are worth seeking out. 

As with the two vintages that preceded it, conditions in 2020 favoured producers with multiple plots of different soil types due to the abundance of both sunshine and rainfall. Right Bank clay soils were better able to retain water and thus sustain the vines. 

Although Bordeaux En Primeur 2020 is undoubtedly a fantastic vintage, investors are advised to be selective and search for relative value rather than being led solely by critics’ scores. 

Through careful study and data analysis, WineCap provides insight into the wines that we feel present both value and opportunity for capital growth. With our bespoke, industry-leading graph and analysis tools we have concluded that the wines selected in this report are attractive prospects and that any carefully built investment portfolio should consider 2020 Bordeaux.

Click the button below to download our Bordeaux En Primeur Report. Do not hesitate to get in touch and speak to one of our wine investment advisors to reserve your allocations.

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News

Welcome to WineCap

Vineyard with path through it

Hello, we’re WineCap and we’ve changed our name from Westgarth Wine Investments to give it a bit of a refresh, invested more in our technology, streamlined the new site and have added extra features that benefit our visitors. You can now schedule a free 30-minute consultation with one of our investment experts. We’ve also created the Academy which is a hub of online resources.

New Name. Same Team.

We’re still the same independently-owned company and team who’ve been proud to serve you for the past ten years and who will continue to offer expert investment advice for the next chapter of your wine journey.

Do I Need to do Anything?

You don’t need to take any action. Your online details remain the same, there are no changes to the wines you hold or where they’re stored and you can phone the same people using the usual number.

What’s New?

You’ll see our updated branding on our new website. We’ve also launched the WineCap Academy where you can learn more about the producers you invest in, stay up-to-date on what’s been happening in the market and get the low-down on everything in the wine investment sector. What’s more, you can expect new quarterly reports in order to stay informed with market trends.

So, a big ‘hello’ and ‘welcome’ from all of the team here at WineCap and we’re excited about this new phase of our wine investment journey together.

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Insight

Invest in Champagne

Worker riddling bottles of Champagne

Considering investing in Champagne?

It’s not necessarily the most costly, nor the rarest of fine wine. However, Champagne is supremely consistent, making it arguably one of the strongest and most appealing sectors of the fine wine market.

Its steadfast presence can be attributed to its brand strength, liquidity and an aura of exclusivity it maintains despite being well-known in the main. 200-plus years of expert marketing by the best producers is what arguably makes Champagne the most broadly understood luxury good in the world.

As with all fine wine, as Champagne ages, its quality improves. As it is consumed, its supply decreases. This virtuous circle drives prices over time. This luxurious bubbly tends to be released later than other investable wines and as consumption begins in earnest immediately, we can see the impact of this cycle faster.

Top Champagne Brands to look out for

For those considering investing in Champagne, the most important brands to keep in mind are Dom Pérignon, Cristal, Krug, Taittinger and Salon. Volumes produced vary considerably from producer to producer. Dom Pérignon is widely believed to make around 4,000,000 bottles a year across all their wines. In contrast, in 2020 Salon released just 8,000 bottles of their 2008.

The Best Champagne Vintages

The strongest vintages include 1996, 2002 and 2008. Unlike in Bordeaux or Burgundy, producers tend not to release vintage wines every year, emphasising the exclusivity. This means there are vanishingly few ‘bad’ Champagne vintages. Although of course, some are superior to others, it is no more necessary to focus on only exceptional vintages in Champagne than it is in other regions.

Over the past five years Krug’s value is up 75% and Dom Pérignon up by 65%. These numbers demonstrate that Champagne is a smart addition to any diversified investment portfolio and should no longer be considered just a celebratory indulgence.

Want to find out more about investing in Champagne? Read our in-depth report here.

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Learn

Fine Wine Investment for Beginners

Open road with vineyard beside it

Fine wine investment is increasingly gaining popularity amongst beginners and novices looking to reap the benefits of this alternative asset. Not only is it a proven way to diversify and strengthen an investment portfolio, but also an enjoyable pastime for wine enthusiasts and budding connoisseurs.

Surging prices regularly push fine wine investment into the spotlight, and headlines are filled with stories of investors who bought wine at low prices, then sold it years later for thousands. But how and where do you get started as a beginner? And what are the wine investment returns that you can expect?

The following guide provides an overview of the fine wine investment market and how it works in practice.

How big is the wine investment market?

Investing in wine is no new phenomenon. In fact, it has existed in different forms since antiquity, as wine was circulated and traded throughout the ancient world by Greeks, Egyptians, Phoenicians, and Romans. The writings of Thomas Jefferson provide one of the first pieces of evidence of a premium charged for an older wine. In 1787, he wrote that the 1786 vintage for top Bordeaux wines cost 1800 livres per tonneau compared to 2000 livres for the older 1783. Through the centuries, shrewd wine lovers have been selling part of their collections as a way of subsidising their consumption, leveraging the gains of a uniquely rarifying asset against their own cellars.

Today, the market is transparent and open for beginners as well as experienced investors looking to embark on their wine journey. Investing in fine wine is easier than ever, thanks to specialised wine investment companies, relying on current market data and the latest technology.

The global wine market is forecast to reach US$525 billion by 2025. But while fine wine has emerged as a popular alternative investment, not every wine is investment worthy. For example, the majority of wines produced in renowned regions, such as Burgundy and Bordeaux – perhaps surprisingly – often won’t appreciate in value. In fact, of all the wines made worldwide, only a very small percentage have the potential to improve as they age, and an even smaller percentage of that group has the capacity to see its price rise.

Precisely this scarcity of investible wines is one of the main drivers behind wine investment’s profitability. The limited supply of collectible wine leads to price increases, especially for labels in high demand. This is why it is important to keep abreast of the latest market trends and factors influencing global appetite.

More fine wine investment opportunities than ever before

Historically, Bordeaux’s classified growths have been the leading force on the fine wine investment market. In 2010, Bordeaux took 96% of all trade on the global marketplace for wine. Today, it accounts for less than a third of this market by value.

The main reason behind its declining trade share is that the fine wine investment market is bigger and broader than ever before. Other French regions like Burgundy, Champagne and the Rhône, USA, Italy (led by Tuscany and Piedmont), Germany, Spain and Australia are increasingly seen as reliable sources of considerable wine investment returns.

Investing in fine wine is thus not limited to a small group of wines, contrary to what one might expect. There are more opportunities than ever before that can be suited to your stylistic preferences and budget. The collectors’ market is booming, with record number of investible wines trading right now.

Greater fine wine investment returns

As global demand for fine wine has grown, the investment returns have increased too. Burgundy is a prime example. Thanks to its iconic status and its tiny production levels, early investors in the sector have seen eye-watering growth: upwards of 2000% in 15 years for some wines. The volume, value and breadth of trading has increased significantly, and wine prices have risen dramatically over the last decade; the region’s major index is up almost 200% in the past ten years.

Meanwhile, investors in Champagne have benefitted from supremely consistent returns, although it is not the most expensive or the rarest of fine wines. Its brand strength and distribution network, however, remain unparalleled.

Prices for different regions and wines have risen at a different pace. Region and wine-specific factors thus play a role in the returns that an investor can expect, the cost and length of the investment.

How long do I need to invest in fine wines for?

Fine wine is considered a medium to long-term investment. As a general rule, we advise our clients to hold their wines for three years at the very least.

Many collectible wines have long ageing windows, between ten and 50 years. As the scarcity and quality of fine wine appreciates over time, so does its value. The premise of fine wine investment is to buy wine when it’s young, then sell it once it’s older and more valuable. There are other external factors that may help determine how quickly a wine may deliver the desired returns such as critic scores, supply/demand and significant events related to the region or the producer.

For instance, the price of the Super Tuscan Sassicaia 2015 went up 25% in the day when the American publication Wine Spectator announced its ‘Wine of the Year 2018’. Those buying and re-selling the wine on the day would have made a small profit; however, those holding the wine since release would have seen its value rise over 160% to the present day.

As a long-term low-risk investment, fine wine doesn’t lose its value overnight. Where share prices may increase one day and decrease the next, fine wine provides stable returns year after year. Its low volatility has led many to consider it the best ‘safe-haven’ asset – a great advantage particularly in times of market turmoil.

Unlike mainstream assets, fine wine is fairly insensitive to macro-economic events. When global markets tumbled due to ongoing Covid-19 restrictions and upon Russia’s invasion of Ukraine, fine wine remained resilient. The returns of leading fine wine indices were greater than the FTSE100, S&P500 and even other safe investments such as gold.

How do I start investing in wine?

There are a lot of decisions you need to make when taking on wine investment. Wine investment experts like our team here at WineCap can help you make decisions relating to the following factors:

Set a wine investment strategy

The first step is to set your budget. Consider how long you would like to hold your wines for and your preferred investment strategy. Fine wines command a range of prices depending on the producer, how much of their wine is made and the wines’ age. Make sure to set your budget before embarking on building your portfolio so you can ensure you have exposure to all countries and regions.

Speak to a wine investment expert

There are different routes to accessing the wine investment market, such as through specialised retailers and auction houses. Expert wine investment brokers offer unbiased advice on strategic investment opportunities and can help you build your portfolio, based on your preferred length of investment and budget. While WineCap doesn’t charge any annual fees, most wine investment companies do, so be sure to do your research and be aware of any fees your portfolio might incur.

Select world-class wines for your portfolio

A wine investment expert will help you find the wines best suited for your investment portfolio. WineCap has formed long-lasting relationships over the past decade with négociants, wholesalers and private collectors. This means that we have access to some of the world’s most prized wines. What’s more, our unique proprietary technology analyses over 400,000 wine prices a day to identify the right, undervalued wines to buy and sell across the global market at the right time and price.

Store your wines professionally

Choose to keep your wines in government bonded warehouses as this will ensure they are professionally stored in temperature-controlled conditions best-suited for ageing wines. World-class care ensures that when you come to sell, your wines’ provenance will quickly secure maximum prices.

Fine wine investment can be daunting if you are a beginner, but with a little practice and help you can soon enjoy the benefits of the best-performing luxury asset.

Ready to get started now you know more about how to invest in wine? Speak to one of WineCap’s investment experts to discover the next steps on your wine journey.

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Insight

Ten of the most Expensive Wines in the World

Rack of expensive wines

Wine has been a staple at the dinner table and in people’s lives for centuries, but did you know the quality of wine increases over time? Which subsequently leads to an increase in value? These factors have made wine collection a popular hobby for many.

Wine collectors will buy rare and expensive wines, store them for a number of years and then sell them for a higher price. This is known as wine investment.

In this article, we take a look at ten of the world’s most expensive wines, summarising their prices, types, grape varieties and regions.

What makes wine so expensive? 

Collectible wines, or investment-grade wines, are wines that could increase in price from their original cost as time goes on.

There are several elements to question to find out whether your wine is investment-grade or not, such as:

  • Is the brand well known? Reputable brands create high-quality wines that have a high demand, which can mean a higher price.
  • Does the wine have positive reviews from reputable critics?
  • Will the quality increase when the wine ages?
  • How many bottles of the wine have been produced? A limited-edition wine is going to be more expensive than a winemaker that produces many hundreds of thousands of bottles a year.

Ten of the world’s most expensive wines

Taking into account what is mentioned above, we have looked into ten of the most expensive wines in the world and why they carry such a high price tag.

Domaine Georges & Christophe Roumier, Musigny Grand Cru

Producer: Domaine Georges & Christophe Roumier

Average price: £13,595

Wine type: Red

Grape: Pinot Noir

Region: Burgundy, France

Domaine Georges Roumier is a wine producer that creates highly commended and expensive wines, based in the village Côte de Nuits in France. The vineyard consists of over approx. 28.5 acres of land across multiple regions of Burgundy.

‘Grand Cru’ is a classification of the quality of wines produced across Burgundy and Alsace and is the highest grade you can get. It means that the land the grapes grow on and the vineyard itself is of high quality, reaffirming the value of the wine.

Château Margaux

Producer: Château Margaux

Price: $225,000 (gained by insurance reimbursement in America)

Wine type: Red

Grape: Bordeaux blend

Region: Bordeaux, France

A bottle of this wine, created in 1787, was said to be a part of Thomas Jefferson’s personal collection.

A wine trader called William Sokolin later acquired it and took it to a dinner in Bordeaux, where the waiter knocked it off the table and smashed the bottle. Sokolin was later reimbursed with $225,000 by his insurance company, but the bottle was originally thought to be worth $500,000.

Domaine Leroy, Musigny Grand Cru

Producer: Domaine Leroy

Average price: £31,691

Wine type: Red

Grape: Pinot Noir

Region: Burgundy, France

Founded in 1868 by wine merchant François Leroy, the Domaine (vineyard) is now owned by Lalou Bize-Leroy, who also owns Domaine d’Auvenay.

This dry red wine is produced from Pinot Noir grapes and is the by-product of biodynamic farming. This ethical approach to farming provides nutrients to the plants by using their own composting measures, as opposed to using chemical fertilisers. Although more labour intensive, this method produces high-quality crops and is better for the environment.

Krug Vintage Brut Champagne

Producer: Krug

Price: Sold for £14,800

Wine type: Sparking wine

Grape: Champagne

Region: Champagne, France

Krug is known for being one of the renowned houses in the Champagne region, making their wines some of the most sought-after and expensive in the area.

In 2009, a bottle of Krug Vintage Brut Champagne, created in 1928, was sold at an Acker Merrall & Condit auction in Hong Kong. At the time, it was the most expensive bottle of Champagne ever sold at auction.

Screaming Eagle Sauvignon Blanc

Producer: Screaming Eagle

Average price: £4,610

Wine type: White

Grape: Sauvignon Blanc

Region: Oakville, USA

Although not the most expensive wine on the list, this is one of the most expensive white wines from the North Coast of the United States.

Established in 1986, Screaming Eagle is based in Napa Valley in the USA and is one of the original cult wines to be created in the area. Its higher prices stem from their low production numbers.

Domaine Leflaive, Montrachet Grand Cru

Producer: Domaine Leflaive

Average price: £12,430

Wine type: White

Grape: Chardonnay

Region: Burgundy, France

This particular domaine does sell wines that are significantly cheaper, but as these grapes are harvested from vineyards with a Grand Cru classification, therefore increases their value.

This barrel-fermented wine has a buttery and citrus flavour.

Liber Pater

Producer: Liber Pater

Average price: The 2015 variety had an average price of £27,500

Wine type: Red

Grape: Bordeaux blend

Region: Bordeaux, France

This vintage wine was created in 2015, and due to its very low production numbers and the use of grapes from ungrafted vines, that makes them some of the most expensive wines in the world.

Château d’Yquem

Producer: Château d’Yquem

Price: Sold for £75,000

Wine type: Dessert

Grape: Semillon & Sauvignon Blanc

Region: Sauternes, France

A bottle of Château d’Yquem, created in 1811, was sold in 2011 at the Ritz hotel by the Antique Wine Company, rare wine experts. It was sold for £75,000 to Christian Vanneque, and at the time, the Guinness Book of World Records stated that was the most expensive standard bottle of white wine to be sold at auction.

The wine bottle is said to be on display in Mr Vanneque’s restaurant in Bali, protected by bulletproof glass.

Domaine Leroy, d’Auvenay Chevalier-Montrachet Grand Cru

Producer: Domaine d’Auvenay (part of Domaine Leroy)

Average Price: £23,439

Wine Type: White

Grape: Chardonnay

Region: Burgundy, France

Domaine d’Auvenay is owned by Lalou Bize-Leroy, making it part of Domaine Leroy. This four-acre estate, which is not solely for this particular Chardonnay, means that production numbers are small.

Egon Müller, Scharzhofberger Riesling Trockenbeerenauslese

Producer: Egon Müller

Average Price: £12,147

Wine Type: Dessert

Grape: Riesling

Region: Mosel, Germany

Based in the Saar Valley in Germany, the producer Egon Müller’s family has solely worked with the Riesling grape since their inception in 1797, creating a sweet dessert wine with citrus flavours.

Why should I invest in wine?

Wine is a great alternative to traditional investment methods like buying stocks or bonds. Expensive wines have very little connection to the global stock market and is a lot more consistent than gold and real estate.

Investing in wine also gives you a great excuse to expand your wine collection!

Your wine investment journey starts here

WineCap gives you access to the top investible wine allocations. Once we have discovered your preferences, you will have access to a vast portfolio of the most investable wines stored in secure government bonds.

We don’t charge a management fee and our brokerage charges are very low, so you have access to rare wines at a fair price.

To start your wine investment journey, schedule a consultation with one of our experts.

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Learn

Your Wine Investment Questions Answered

Man at laptop checking investments

Investment in fine wine is a great investment alternative for any hobbyist and can give you a healthy return too! But if you’re a novice to wine investment, you may have a lot of questions.

This article explores the most frequently asked questions about fine wine investment to help you understand more about it.

Wine Investment FAQs

Is wine a good investment?

As an alternative to stocks and shares, fine wine investment is a pursuit that has increased in popularity over the years. The scarcity and quality of fine wine appreciates over time, as does it value. This, among other contributing factors, makes fine wine a highly sought-after asset.

With a proven stable price growth, this medium to long term investment is a great way to strengthen your investment portfolio. It’s also a great excuse for any budding wine connoisseur to expand their collection!

Which wine appreciates the most?

It can be tricky to determine which wine’s financial value will appreciate over time, as it’s not always as simple as “the more well-known wines will give you a better return on investment”. For example, the vast majority of wines produced in renowned regions, such as Burgundy and Bordeaux – perhaps surprisingly – often won’t appreciate in value. In fact, of all the wines made worldwide, only a very small percentage have potential to improve as they age, and an even smaller percentage of that group has the capacity to appreciate in value.

Looking at the previous records of appreciation for wine can give you an idea of whether it is a good investment choice or not, as can keeping abreast of current trends and demands that are influencing the marketplace.

Is wine investment profitable?

According to a (the global marketplace for wine trade), the price of prices of fine wine increased in 2021 reaching an all-time high. The fine wine market often outperforms other global stock markets, making it a profitable alternative investment option for people who wish to expand their investment portfolio.

How do you store investment-grade wine?

It is important to make sure that wine is stored correctly, if they’re not stored in the correct conditions your wine could decrease in value.

Investment-grade wines are normally stored in bonded storage. These are secure locations that have been approved by HMRC for storing items that haven’t had VAT or duty paid on them.

These optimal storage conditions also tend to increase the liquidity of fine wine, making for quicker conversions of assets into cash.

What is the risk of investing in fine wine?

Like any investment, there is always an element of risk involved. One risk with wine investment is if a critic gives a negative review on a particular wine you have invested in, demand may dwindle and the value of the wine is therefore likely to decrease.

However, wine investment is considered to be a low-risk investment. The value of wine is protected during inflation and insecure economic periods, mostly thanks to its physical tangibility as an asset.

What tax is applied to my wine investment?

Fine wine is considered a ‘wasting asset’, which means that your wine is exempt from Capital Gains Tax when it’s sold. You can be charged Inheritance Tax, which is the tax on an estate of someone who has passed away if the estate is worth over £325,000.

We recommend seeking tax advice from a professional advisor before you start investing in wine.

How much should I invest in fine wine?

There is no set rule for how much money one should invest in fine wine. Investment-grade wines are a luxury commodity; to ensure you have a wide variety of options to invest in and to get a good return on investment, most people tend to start off in the vicinity of £5,000-£10,000 to make their investments worthwhile.

However, as with any given speculative investment, you should be prepared to lose that money. It’s not advisable to make such an investment if the loss of your invested funds would debilitate your financial situation.

What are good wines to invest in now?

When you look into wines that could be good to invest in, keep an eye on wine investing news to identify trends in the market and see where the opportunities are. You should also consider working with our investment experts, who will be able to give you unbiased advice on what wines you should be investing in.

Take a look at some of our related blogs for more information:

  • The beginner’s guide to wine investment
  • Ten of the world’s most expensive wines
  • Is buying Bordeaux En Primeur still a good investment?

There are several things to consider when you invest in wine. One of the most important things to consider, if you are new to the industry, is whether to seek the help of a fine wine expert.

What is important when investing in wine?

WineCap can give you access to the top investable wine allocations and an extensive portfolio of investment-grade wines, as well as guide you through the steps you need to take to get the most out of your investment.

Start investing in wine today

Schedule a consultation with one of our wine investment experts to start your wine investment journey today.

Categories
Insight

Is Buying Bordeaux En Primeur still a Good Investment?

Barrel room at Chateau Lynch-Bages

Bordeaux – a treasured destination for wine lovers the world over and a renowned benchmark of the fine wine market. But are Bordeaux En Primeur wines still considered a good investment?

Whether you’re a seasoned connoisseur or a budding wine investor, this article will help you decide whether investing in Bordeaux En Primeur wines is a worthy addition to your portfolio.

How buying ‘En Primeur’ wine works

En Primeur, also called ‘wine futures’, is a method of purchasing newly produced wine early on before it’s even been bottled and released onto the market. En Primeur wines are usually shipped to the buyer between 18 months and three years after being bottled.

En Primeur wines are bought ‘In Bond’ (i.e., exclusive of Duty and VAT). They are often cheaper than the future price of those wines when they become available to the open market (10%-30% cheaper, on average) because they’re being bought a good two years before the wine has been bottled, meaning they have only been reviewed and scored by a few critics.

The attraction of Bordeaux En Primeur

Buying En Primeur wine is a custom that dates back hundreds of years exclusively to the world-renowned wine region of Bordeaux, France. Indeed, it is a concept that is still highly regarded today.

It’s no secret that the Bordeaux region produces some of the world’s most prized wines. In fact, Bordeaux has been a staple in the cellars of seasoned wine collectors for centuries.

Sought-after due to their ageing potential – among other factors – buying Bordeaux En Primeur can often be the best way to secure particularly good vintages with limited availability and the strong potential to appreciate over time.

Other benefits of investing in Bordeaux En Primeur wines include:

  • You may be able to request a specific format for the wine, be it halves, magnums, or larger bottles.
  • When you buy En Primeur wine, you’re guaranteed provenance, given that you’re buying directly from the winery.
  • Some Bordeaux wines are simply impossible to obtain if one does not purchase them at such an early stage.

What are the risks involved with buying Bordeaux wine En Primeur?

As with any endeavour to obtain assets, investing in Bordeaux wines En Primeur is not without its risks.

First and foremost, there is no guarantee that any wines you buy En Primeur – be it the latest Bordeaux vintage or otherwise – will appreciate over time. There is, however, always the potential for your En Primeur-purchased wine to lose value over time.

What’s more, some critics of the En Primeur system say that selling wines in their youth doesn’t accommodate a proper review and rating of the vintage in question.

Further, it has been suggested that the Bordeaux negociant system is a ‘delicate’ one, as it can tend to reward buyers with a well-established purchase history, which can make the process difficult for new buyers.

Is Bordeaux En Primeur still a worthy investment?

To answer that question, let’s take a look at the investment potential of the Bordeaux 2020 vintage.

According to the Bordeaux En Primeur 2020 Report, the 2020 vintage was of excellent quality and yielded many outstanding wines. Here are some additional highlights from that report:

  • Production is down slightly in comparison to the 10-year average. This is largely due to hot weather affecting the grapes.
  • Despite disruptive factors such as the coronavirus pandemic, it is a well-priced vintage overall, though less consistent than the previous vintage.

So, is Bordeaux En Primeur still a worthy investment? Here’s what Alex Westgarth, CEO of WineCap, thinks:

‘When it comes to buying Bordeaux wine En Primeur, it all depends on the vintage. Anyone considering it should be aware of the balance between quality and price in a vintage.’

In addition to those wise words, it’s also important to keep in mind that it’s still quite early to be drawing such conclusions about the Bordeaux 2020 vintage.

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