Wednesday, 13 March 2013

Wine Investment

The term 'wine investment' has become a more frequent phrase in the last 24 years since I have been in the wine trade. Wine investments are now increasingly popular as other investments have become more diffcult/volatile/risky.
 People work very hard to make wine, then ship wine all around the world to different markets. Inevitably there are many people involved in the process from the vineyard to the dining room table. Agents, importers, distributors, wholesalers, retailers all need to make a living and therefore a margin.  These roles are quite clearly defined and even with modern efforts to make wine more competitively priced and the 'direct sales' model advocated by mail order or internet companies, sometimes it can be difficult to actually make a sensible return of profit. Retailers have large overheads and an uncertain economic climate, whilst wholesalers have slimmer margins and the risk of bad debt as restaurants feel the pinch. Fuel, transport, import taxes and foreign exchange fluctuations can seriously erode margins for distributors and wholesalers.
However amongst all the problems for trading wines there have been some significant financial gains to be made in the fine wine market as wine investment. But beware like all investments there are inherent risks and occasionally peaks and troughs to endure. One immediate advantage if you do lose money with your wine investment is that you still have an asset ( even if it is at a reduced value)........and you can drink it!!!
Chateau Ausone has a very small vineyard and is a Premier Grand Cru Classe (A) in Saint Emilion. But is it a good investment?

There is an increasing amount written about wine investment such as this recent article in The Daily Telegraph. It will be interesting to see whether the fine wine market appreciates by 14% in 2013. The signs are certainly looking good at the moment.

Like any investment there are crucial aspects that need to be implemented in order to achieve the best results. One crucial aspect is genuine market advice. Which Chateau is the next big thing?
Which area is surging forward?
Which are the genuine 'good buys'?
What is the provenance of the wine?
What are sound good long term investments rather than short term spikes?

The potential gain can be significant, whilst everyone should enter any investment with their eyes wide open as there could be a  potential loss. However one significant advantage to wine investment is that the investment is a tangible physical asset rather than a paper share certificate. There is always the consolation that the wine can be enjoyed as a drink.....whether the investment improves or not!!

I have a 'wine investment portfolio' that I have mainly kept for personal a few years time I hope to share some good bottles with friends and family. In recent times I have been checking the value of the portfolio as an investment and tracking each month the value. We are riding a wave at the moment with an increase in value of 3.72% between January and February and an increase of 7.92% between January and March. This is an area that I feel I am very well placed to offer genuine advice, as I have good contacts with the Chateaux in Bordeaux via Bella Wine Tours, and I am the commercial agent for a well established negociant in Bordeaux. I should be able to get the right allocations of the right wines!

Monday, 11 March 2013

Is wine good for you?

The immaculate vineuards of Chateau Fonplegade in Saint Emilion.

There have been several articles about wine and health recently in the UK press. With the Chancellor of the Exchequer announcing his financial budget next week, there are bound to be increases in UK taxation. (A bottle of wine is currently taxed at £1.90 plus 20% vat in the UK).
There always seems to be a propaganda agenda for the anti binge drinking brigade just before any budget, as if to sanction the reasoning behind taxing alcohol.
But wine can be extremely good for you. There are anti oxidants and relaxants in alcohol that can act as anti depressants. The taste and flavour of wine can be delicious. Food can be enhanced by interesting wines.
And it is scientifically proven that wine contains resveratrol, an organic chemical believed to have an anti-ageing effect, by boosting activity of a protein called SIRT1.
This interesting recent article in The Daily Telegraph explains a little more about the tests. But I am not sure whether it is a good thing to live to 150 years old!!!
There have been previous articles about the health benefits for wine. But one article explained that for a positive benefit of resveratrol you would in fact need to drink 700 glasses per day, which might counter act any health benefits!!!
Why don't we just enjoy a wonderful natural unadulterated drink such as wine. There are so many flavours styles and tastes to explore. If a glass of wine relaxes you and is also good for you then that is a great side effect. I don't enjoy inept, immoral hypocritical politicians telling us what we should or should not do at the best of times, but taxing alcohol is an easy target for the negative aspects of alcohol related crime and the negative effects of hard/distilled alcohol.