Investing in Wine 

Great wine is on the radar of the international elite in a way that it has not been before. Combine this with activity from several bespoke wine funds and significant interest from Russia, China and now India, and great wine presents some very interesting investment opportunities.
 
The principle is simple: demand for the truly great wines, which are made in extremely small quantity, vastly (and increasingly) exceeds supply, so prices rise. As the wines mature and are consumed, they become rarer and correspondingly more expensive.
 
As demand for fine wines worldwide has increased the appreciation of great wines has been seized on by consumers as an alternative to traditional investments like the stock market, property and bonds. John Armit has been advising clients on establishing wine investment portfolios since 1982, and works with our Private Client advisers to ensure that this service is a core strength of armit.
 For a personal consultation, please contact the Private Client Team on 020 7908 0660 or private@armit.co.uk.

 

Why invest in wine?

  • Wine is an international commodity.
  • There is a limited supply of the finest wines. The annual production of the top 16 Bordeaux wines is less than 250,000 cases.
  • In addition to the traditional markets in Europe and the USA; Japan, Hong Kong and Malaysia have become important and China, Russia and now India are emergent markets. Inevitably, the consumption of great wine follows economic power.
  • If carefully selected and bought at the right time, wine has consistently out performed other investment mediums.
  • At the time of writing, wine is not currently subject to capital gains tax in the UK, being deemed a ‘wasting chattel’ by the Revenue.

Which wines to invest in?

  • Great Bordeaux wines have consistently provided satisfactory returns on investment - they are the most famous in the world and production is finite, defined by specific geographical areas.
  • Over a period of time, demand exceeds supply and prices rise.
  • It is important to remember that great Bordeaux wines have a long life; in good vintages a minimumlifespan of 20 years is to be expected from the top wines.
  • The best vintages have always outperformed the rest. In the last 20 years these are 1982, 1986, 1989, 1990, 1996, 1998, 2000 and 2005. Initial investment should be concentrated on these vintages, but seeking value in less well regarded vintages is a sensible approach for more established portfolios.
  • Other wines, including great Burgundy, can offer price appreciation, but selection is even more critical and the right advice key.