We have been taking advantage of the inelastic supply and heightened demand characteristics of the fine wine market for over a decade.

During this time, we’ve honed our skills, and carefully selected a range of the most highly regarded wines from the world’s greatest wine producing regions including Bordeaux and Burgundy, as well as the very best from Rhone, Champagne, Tuscany and the Napa Valley.

By monitoring the worldwide auction market, merchants and a global network of private traders, we are able to assess present market trends as well as forecast future trends. We consider the trading history of comparable wines from relevant château in order to form recommendations that are capable of delivering the greatest financial growth within a recommended period.

“The world’s most exclusive wines have proven to be a true liquid asset class for collectors around the world. Indeed, in its Global Investment Returns Yearbook for 2018, Credit Suisse recognizes fine and rare wine as the best performing collectable, delivering great returns for investors”.
Acker Merrall & Condit, June 2018

With the market for fine wine growing dramatically over the past two decades the array of products that can be utilised within the market has naturally expanded. This is why we base our approach firmly around specific criteria set out together with our clients. We take into account hold term, attitude to risk, secondary market patterns, auction trends, proposed expenditure and any unique requests. We then select products that fit the given criteria and ideally include a spread of wines from multiple regions.

We focus on wine holdings that have the ability to display a period of accelerated growth regardless of age or point in the investment cycle. We carefully consider various factors to decipher what, when and how much to invest in any one wine and vintage along with the optimum time and location to realise the best return possible. Some of the more prominent elements of consideration we use include:

Wine Selection

In order to gauge the potential performance of a wine, we consider several contributing factors of success, one of which is to look at the past performance of a comparable vintage from the same producer.
This vintage will share similar attributes such as critic’s score, drinking window, total production released and comparable market conditions as an indicator of:
a) Whether the price level makes the wine a valid investment proposition
b) Where the recommended vintage’s price might plateau

This allows us to reduce the risk to return ratio while ensuring a recommendation has greater potential for sustained growth.

Vintage

Market perception of a classic vintage is a good indicator of price disparity.

As an unwritten rule, experienced buyers generally take a greater interest in the better vintages from the established and most highly esteemed producers. We view these iconic vintages as a blue-chip element within a portfolio. Although they’re not the only way of realising sustainable growth, these wines form a reliable and highly liquid backbone.

“The rarer a wine, the more people are willing to pay ‘whatever it takes’, especially as these wines become older.”
John Kapon – Forbes.com, Jan 2018

CRITIC’S SCORE

Traditionally, collectors and connoisseurs take a critic’s score into serious consideration when buying on the secondary market. The higher the score awarded by a respected critic, the greater the demand. Generally, it’s the wines with strongest demand from the best vintages that have the potential to command the highest prices.

Of the many esteemed wine writers and critics, it’s Robert Parker, and the scoring system he devised, which undoubtedly has had the most influence within the market for investment grade wines.

“Once he had established his reputation, no merchant or wine investor dared ignore him.”
Alan Livsey, Financial Times

It used to be commonplace for the big château in Bordeaux to await Robert Parker’s initial tasting and subsequent score on new en-primeur, (in barrel), vintages before determining what price they would be released at.

Even when Parker released his ‘ten years on’ retrospectives, the effects were clear to see.

An example of this was the Château La Mission Haut-Brion 2005 being upgraded from 98+ to 100 points. Within a six month period of the score being revealed, its trade price increased by over 45%.

However, Parker’s recent retirement has seen the emergence of peers such as Lisa Parrotti-Brown, Neal Martin and Antonio Galloni come to the fore. The previous impact Parker’s scores had on the investment market may now never be recreated and this means some of the most revered wines will never to be duplicated. We take care and consideration to maximise your chances of success.

DRINKING MATURITY

A wine’s ability to improve with age is a major factor when critics award a score. So wines achieving the highest scores often have the longest drinking window. As wines are consumed, supply dwindles rapidly making the wine increasingly rare and pushing the price it commands upwards.

As fine wines tend to be produced in numbers of 200 – 15,000 cases per year, a drinking window can start 15 years after the wine is made, lasting upwards of 35 years.

Imagine the volume available at the midpoint or latter stages of a drinking window and the effect it has on pricing. For example, the Château Mouton Rothschild 2000 vintage has a drinking window from 2015 to 2050. As this wine has been deemed consumable, the price has moved vigorously as shown below. Imagine the achievable price level as it nears its prime?

to consideration that this wine was released onto the market at £2,200 in 2001, translating into 372% growth between 2001 and 2014.

PROVENANCE

Once a wine has been identified as a strong investment proposition, we go to great lengths to establish provenance and condition of the physical article. This includes proving authenticity that wines are provided in the original wooden cases (OWC) and in perfect condition, where and how they have been stored, that they have not already travelled around the world making them less desirable, and using authenticators when working with older vintages or ultra rare products in order to eliminate any chance of counterfeit wines.

As we only offer wines In Bond, this means there are no gaps in the history of the wine and therefore, less chance that the wine has been poorly treated.

By ensuring wines are in optimum condition and there are no gaps in storage history, you can be confident your wines will obtain the best possible returns upon exiting the market.

In order to keep wines in the best condition, once provenance has been determined, we call on the services of London City Bond. All wines are stored at Vinotheque in Burton-upon-Trent, which is widely regarded as one of the best storage facilities in Europe, with the perfect temperature and humidity for wines to mature. Visits are welcome and arranged upon request.

In addition, you benefit from our independent insurance policy covering wines at current market value.

TAX BENEFITS

In the UK, bottled wine is classed as a wasting asset or chattel by HM Revenue and Customs owing to its limited shelf life.

Gains made on the disposal of these wasting assets are generally free of Capital Gains Tax – s.45 (1) Taxation of Chargeable Gains Act 1992 (TCGA 1992), providing the wine will not continue to drink for more than 50 years – s.44(1) TCGA 1992.
We only ever select wines that have a drinking window of less than 50 years.

We strongly suggest that overseas investors seek the advice of an accountant or tax lawyer regarding the domicile tax status of gains realised on wine investments.

Wine does not qualify for exemption from Inheritance Tax (IHT), and we recommend that investors seek the advice of a trusted tax professional.