Britain has become the beating heart of the global wine industry. Not only has wine become the most popular alcoholic drink in a nation traditionally inclined towards beer, but Brits now import more wine per head than any other country.
Wine is often considered the catalyst to good conversation, and has even been praised for its health giving qualities. But to reap its benefits you don’t necessarily even have to open the bottle. Fine wine has, according to The Telegraph, been one of the best performing asset classes of the last 20 years.
Despite this boom in popularity, you may feel that investing in wine is for the ridiculously wealthy, however experts suggest £5,000 is needed to start an investment portfolio. But would-be investors need more than money and a passion for wine. They need knowledge and that requires research. You can start right now.
How to start investing in wine
Before you start investing in wine, it is important that you are completely aware of what you’re letting yourself in for. The London Wine Cellar warn that fine wine investment “requires a lot of thought and research to avoid scams and schemes.”
It also requires at least £5,000, and as such investors should only put in what they can afford to lose. Fine wine, like any investment, involves a certain degree of risk. If you have £5,000 excess capital, then great! It may well be a very interesting and potentially profitable outlet. If you need the money, don’t invest.
It’s worth noting that experts suggest fine wine investment demands a willingness to commit for anywhere between 7 and 10 years, so you shouldn’t get involved if you are looking for a quick return on your investment.
What to look for when buying investing wine
Wine investment and authentication expert Maureen Downey suggests considering several factors, such as the vintage, the vineyard and the producer, when purchasing wine for investment as they will strongly affect the value. These factors separate sought after fine wine from supermarket sludge.
Wine valuation expert Robert Parker has gone one step further and invented a wine ranking system, which works on a 50-100 scale, that would-be investors can use to decide whether or not a wine is worth investing in. Named ‘The Wine Advocate Ranking System’, Parker explains that by taking a ‘very critical look at wine’, investors are more likely to underestimate the wine’s quality than to overestimate it.
Once you have an idea of the wine you would like to invest in, you should make absolutely sure you purchase it from a reputable merchant as wine investment scams aren’t an uncommon occurrence.
How to store investment wine
Although Downey’s advice is worth taking on board, the most influencing factor in wine investment is quality. This is why how and where you store investment wine is so important. Downey puts it succinctly, warning that your bottles are only ever “one unfortunate natural disaster, air conditioning or heater short-circuit or financial market crash away from destruction.”
Of course you can store wine at home. However, buyers will be less keen to pay for wine stored privately as there is a greater risk that the quality of the wine has been compromised. Instead you should store the fine wine you buy in government licensed bonded warehouses such as London City Bond or Octavian Vaults.
Not only are these places specifically designed to store your wine in an airtight environment with the perfect temperature, humidity and lighting, they are also the best way to prove provenance, the ability to show where your wine has come from and how it has been stored, to buyers.