Fine Wine Investment

Learn the basics of fine wine investment in our guide.

Fine Wine Investment

Wine investment refers to the acquiring of specific wines with the intent to sell them on in the hope that the wine’s value has improved. Unfortunately, it is an industry that attracts a lot of scams and can be unlikely to deliver the results promised.

Buying Wine Investments

Fine wine investment has continued to increase in popularity since the 90s. It is important to remember that wine is a long-term investment that requires a minimum of 7-10 years. Anyone promising you quick results is not to be trusted.

The UK government warns against up-front commission when buying investments. This is often the big red flag; if a company is charging commission up-front rather than at the point of selling, it is advisable to proceed with caution. Remember, wine is a long-term investment, so an up-front commission is not in the investor’s interests.

We strongly advise that when entering into a wine investment you do your own due diligence. Using websites such as wine-searcher.com and cellartracker.com, you will quickly be able to gauge whether you are getting a fair price, or as often is the case, lining greedy brokers’ inflated pockets.

A decent wine portfolio will cost approximately £5000 to get started. You will also need to store the wine. Bonded storage warehouses are the most popular option as they avoid having to pay duty or VAT on your stored wine. However, it’s important to take into account the cost of storage when investing in wine as it may affect how worthwhile it is, especially with lower value cases.

It is also vital that you have your own storage account; with many unscrupulous firms, the wines are held in their names, this gives you no security or control over your wine investment.

Investment wine requires a lot of thought and research to avoid scams and schemes. It is often advertised as “recession proof” which is certainly not true.

Never invest more than you can afford to lose; no investment is fool-proof, least of all wine investment, and it should never be a majority part of your portfolio.

Wine Investment Methods

There are two main methods for investing in wine. One is to purchase and re-sell individual bottles or cases of certain wines at a later date, hopefully at a higher price than when you bought them. The other is to purchase shares in an investment wine fund that pools investors’ capital.

The first option often requires the assistance of a wine merchant, broker or consultant with an in-depth knowledge of the wine market to help guide one’s purchases. This helps to minimise the investment risk.

However problems have been known where brokers have persuaded clients to buy wine at an inflated price or go entirely AWOL or into liquidation. This can leave clients either with nothing but a big loss or wine they do not necessarily know what to do with “under bond”. We help clients that find themselves in the latter situation on a daily basis by releasing their investment and achieving the best possible sale price.

Wine funds are a little less risky but require a heavier wallet and a lot more patience when it comes to exiting your investment. There have been some bad operators, and as with all forms of investment, it is incredibly important to do diligent research on the fund and its managers.

Selling A Wine Investment

When investors want to sell investment wine, the reasons will vary from relieving themselves of bottles they will never drink to wanting a return on a ten-year investment. Whatever your reason, we aim to make the process easy.

With The London Wine Cellar you will be required to fill out a wine valuation form, stating the wines you are wishing to sell. We are able to make fiercely competitive offers due to our extensive knowledge of the wine investment industry and close relationships with global buyers.

Once we have received the wine and inspected the condition, we process your payment immediately so that you may realise your investment and put the money to use as you wish.

The London Wine Cellar have years of experience in the wine industry and we aim to make selling investment wine as simple and transparent a process as possible. Above all, we value our clients’ trust. We are proud that a huge proportion of our business comes our way by word of mouth and recommendation.

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