If you want to build a fine wine cellar for its financial returns we are here to guide you.
Why investing in Fine Wines?
Fine Wine has become an interesting investment opportunity and an excellent addition to diversify an investment portfolio.
3 main reasons:
1. The Fine wine market is regulated by the simple supply and demand laws:
- Limited and Decreasing Supply: the fine wine supply is limited as only a small quantity of fine wines is produced each year (1855 classification). The supply becomes decreases because the bottles are consumed every day everywhere in the world. In the meantime, fine wines quality improves with the aging process.
- Booming Demand: Fine wine is a luxury product and as such its demand is constantly growing everywhere in the world. There are an increasing number of people drinking fine wines and investing in fine wines. Demand is also booming due to the increasing interest from the Asian market since the abolition in Feb 2008 of the wine duty by the Hong Kong government.
Therefore, with a limited, decreasing Supply and a Booming Demand, fine wines price increases naturally.
2. The Fine Wine market shows low correlation with the regulated financial market
As per a report from the American Association of Wine Economists (AAWE Working Paper N.57 from Philippe Masset and Jean-Philippe Weisskopf) published in March 2010), …“fine wine yields higher returns and has a lower volatility compared to stock especially in times of economic crises”. It shows “low correlation with the other asset classes” and “…the addition of wine to a portfolio as a separate asset-class is beneficial for private investors”. Their findings show that “the inclusion of wine in a portfolio and especially more prestigious wines increases the portfolio’s returns while reducing its risks, particularly during the financial crisis”.
3. The Fine Wine market is a transparent market
Over the past 10 years, indices have emerged e.g.: Liv-ex Indexes (the most popular: the Liv-ex100 Index calculated on the price movement of the 100 most sought after wines); the most interesting for fine wine investment: the Liv-ex Fine Wine Investables Index: created to track the wines commonly found in a wine investment portfolio. This index consists of Bordeaux red wines from 24 leading chateaux. The component wines date back to the 1982 vintage and are chosen on the basis of their score from Robert Parker. The wines are priced using the Liv-ex Mid Price with various scarcity weightings applied to account for older vintages and wines produced in smaller quantities, source www.liv-ex.com).
Those indices have dramatically improved transparency and liquidity in this market and have rendered the fine wine market even more attractive to investors.
Which wines should I invest in ?
For investment, we only offer wines that have the potential for achieving a high return and proven record on the secondary market; this is why we predominantly choose wines from the best Bordeaux Châteaux (Premier Crus): Chateau Lafite-Rothschild, Latour, Margaux, Mouton-Rothschild, Haut Brion and the most thought after Burgundies: Domaines Mugnier, Groffier, Rousseau, Coche-Dury, etc.. all from the best vintages. We focus on wines with a Robert Parker score over 90 pts.
We make sure that the wines we offer are always in immaculate condition (OWC), stored in a specialised bonded warehouse (temperature and humidity controlled).
Is it a Tax-free investment?
Wines stored in an in-bond warehousing facility are not subject to VAT or duties.
Because, according to HMRC and under current UK taxation regulations, wine is classified as a “wasting asset” (predictable life not exceeding 50 years) and as such is not subject to Capital Gains Tax (as long as the acquisitions and disposal of the wine are made by private individuals and are not regarded as "trading"). But, please refer to the HMRC website for further guidance in this matter: http://www.hmrc.gov.uk/cgt/possessions/basics.htm#2 and get advice from a tax specialist if you need more information.
We start by assessing your needs and wishes and depending on how much you want to invest, we offer you different types of wines to buy.
We offer to store your wines in a Wine Invest sub-account (under your name) at London City Bond Tilbury (UK government bonded warehouse, VAT and Duty free) for a special rate of £8+VAT p.a per case of 12 bts (including insurance).
Once we receive your payment, our Logistics department arrange In Bond storage and insurance for you.
We sell the wines on your behalf when you decide to do so (there is no fixed term but please note that in order to insure substantial returns we recommend 2 years minimum term).
What are our fees?
We do not charge any portfolio management nor investment return fee. You only pay us the purchase price (and delivery charge if applicable). When you decide to sell your wines you are absolutely not tied to selling through us. We offer your wine to our customers on a broking basis. Upon sale, you will receive 94% of the selling price and we take a 6% commission for wines stored in our premises.
For any further questions or queries please feel free to call us on +44 (0) 20 7394 3790