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Investing in wine: premium bottles that are worth the wait

Wondering how to invest a few thousand pounds? Luxury London discovers why we should be storing, not sipping, some of the world’s finest vintages

Who initially coined the idea of buying wine for profit as well as pleasure? Well, the Brits were some of the first off the starting line, purchasing excess cases of Bordeaux classics like Château Latour to sell at a later date. This provided welcome funds for purchasing later labels and was the pursuit of wine aficionados, rather than a full-blown investment market.

That was until the late 1990s, when demand – particularly from Asia – rocketed for the world’s finest wines. Today, London represents a completely globalised market and the capital’s elite are consuming fine wine brands without even bothering to examine the price tag in any detail.

Just ask Yevgeny Chichvarkin, the Russian mobile phone tycoon who opened Hedonism Wines on Davies Street in 2012 to cater to this lucrative market. A bottle of 1982 Lafite can be yours for just under £5,000.

Indeed, according to experts, top Bordeaux wines remain highly sought after, both for collectors and speculators. “The majority of fine wine purchased by value and volume are wines from Bordeaux,” says Chris Campbell, CEO of Rothschild’s Waddesdon Wine.

“I would recommend a newcomer to the sector to purely look at this area, and further recommend they focus on wines from the Left Bank appellations in the Médoc.

“Illustrious names such as Léoville Las Cases, Château Mouton Rothschild and Château Latour have consistently shown strong returns for investors over the past 20 years,” he adds. “The second wines of top châteaux have been in huge demand recently. Petit Mouton de Mouton Rothschild has shown strong increases from release pricing, as has Carruades de Lafite.”

Campbell has certainly sold plenty of the fine and rare in his time, including vintage Krug, Mouton Rothschild 1945 and the rarest of them all – Lafite 1961. The latter is hardly ever seen, and only a few bottles have appeared at auction over the past decade.

Meanwhile, Alistair Viner, a respected buyer at Hedonism Wines, presides over such remarkable bottles as Screaming Eagle 1992, 1811 Château d’Yquem and special edition large-format bottles, including a 15-litre bottle of Cristal.

However, Simon Staples, fine wine sales director at Berry Bros. & Rudd also advises would-be speculators to buy multiple cases of the same wine. When it comes to re-selling your assets, it will make the portfolio more attractive as the wines can be offered to a far larger customer base.

“Generally, if you buy the best vintages and wines you won’t go wrong. 2009 or 2010 and 2015 are all amazing vintages for Bordeaux, and for Burgundy look out for 2002, 2006, 2008 or 2012 vintages,” says Staples. 

“Generally, if you buy the best vintages and wines you won’t go wrong. 2009 or 2010 and 2015 are all amazing vintages for Bordeaux, and for Burgundy look out for 2002, 2006, 2008 or 2012 vintages,” says Staples. 

Yet the wine trade concedes that France doesn’t have a monopoly on fine wine investment. “Buyers should not ignore the likes of California at the very premium end, where there are a great deal of critically-acclaimed wines made in very small quantities,” notes Viner.

In the end though, the secret is to simply purchase wines that are globally revered. In Italy that includes Ornellaia and Sassicaia, while California’s Screaming Eagle attracts obscene prices on the secondary market (as much as $500,000).

Of course, purchasing cases of Château Lafite is only the beginning. Wine speculation is not a vehicle for rapid returns, nor is the return of your investment guaranteed. Moreover, the key question of storage arises, as wine can be easily spoiled in the wrong hands.

But in this regard the wine trade is in complete agreement. “Use bonded warehouses,” they chorus. “Commercial bonded storage, fully insured and temperature-controlled is essential,” says James Hocking of the Vineyard Cellars. “Having wine stored under bond means no duty and VAT, so the wine can be sold all over the world with relative ease.”

According to Campbell, the two most reputable UK bonded warehouses are Octavian and London City Bond. “A bond rotation sticker on a case of wine from London City Bond or Octavian is akin to a stamped service book on an expensive car,” agrees Hocking.

The question of when to resell your wine, however, is far more difficult to answer. A one-size-fits-all strategy will never work, particularly as the value assigned to certain wines varies enormously according to the vintage in question.

“As with any item, its price fluctuation will vary considerably on supply and demand, and may well appreciate quickly if it receives a spectacular review, or is in a vintage where a lot less wine is produced,” observes Viner.

He continues: “If you take something like Château Lafite for example, the price went up year-on-year at a rate of knots before suddenly falling rapidly once there was a change in demand. While many buyers will still make money from their original purchase price, it will be a lot less than they could have realised if they had sold at the peak of the market.”

Viner strongly advises buyers to seek the guidance of Liv-Ex, a wine trading platform that monitors the prices of fine wines on the secondary market.

“The 2010 Bordeaux vintage was released at the top of the market and has fallen considerably,” says Liv-Ex director Justin Gibbs. “It currently offers value relative to its release. It is important to remember that, as with all investments, timing is everything. With wine, the demand-supply equation is the basic principle: prices go up in value as the wine gets older.”

Always exercise caution when investing. Wine fraud is a growing phenomenon, so only buy from established merchants like Berry Bros. & Rudd to ensure you get the expertise required. That way you can rest assured you’re protecting your portfolio as well as your bank balance.