Welcome to our unique information for wine investment
Why does fine wine go
up in value?
Fine wine matures once bottled and improves with age. A limited
amount is produced every year (up to 20,000 due to French law) so
when bottles are bought, the supply of the wine becomes rarer and
therefore the price increases. While supply disappears, demand for
mature wines can make early purchases an especially good investment.
Demand and interest in fine wine is growing around the world and
supply of the top wines cannot be increased. Fine wine investment is
considered one of the best tangible assets.
Do I need to know a lot about fine wine?
You do not need to have much knowledge in the subject, as an
investment service we will take you from beginning to end as
comfortably as possible! We strongly recommend seeking advice when
investing in wine as not all well-known wines are suitable for
investment and so it is possible for potential investors to put
funds into the wrong type of wines. Cult Wines deals only with the
top 50 investment wines and has advice from financial experts and a
‘Master of Wine’ of which there are only hundreds of in the world.
What are the advantages of wine over other investments?
Finite Product: You are investing in a tangible, improving asset
that has a limited production but a huge global demand base. The
supply of this already limited asset then declines over the years as
the wines are consumed.
Tangible Asset: Shares that fall in value are good for nothing save
for selling at a loss. Wines that do not perform financially as well
as expected can be enjoyed.
Tax: Your investment is exempt from duty and VAT and, in theory;
profits are exempt from Capital Gains Tax. Please note that we
advise you to consult a financial institution or an IFA for
Performance: Wine has performed very favorably amongst the strongest
investments over the past few years. Even in times of macro-economic
downturn, wine tends to remain more robust than many other
What are the risks?
Investment - It is an investment market like any other, so be aware
that prices can go down as well as up.
Unregulated Market - Only buy from established merchants and ensure
you get the expertise needed.
Investment Term - Short term gains have been possible over the past
two years though your investment should be viewed as a mid to
long-term one. At least five years should be considered the norm,
eight to ten years being better.
Wine Types - Only specific wines will tend to accrue value, and
these wines tend to be expensive. Make sure that you are buying the
right wines at the correct prices.
What sort of wines should I invest in?
Always speak to an advisor, as they can give you information as to
which wines are performing best on the market at that particular
time. As a rule of thumb, only ever invest in the top wines of
Bordeaux and allow advice from your broker for diversifation once
you have a solid foundation. You can then look at other areas for
specialist investments. Whilst other parts of the world make good
wines, the global secondary market has a smaller demand for these,
so it is best to keep your portfolio made up of Bordeaux.
`En Primeur'. What is this?
En Primeur is the name given to buying wines before they are bottled
(i.e. a future). This is the most common way for our clients to
invest, and once the initial tasting (wine test – points scored out
of 100) have been given, the risk is considerably lower and the
price is still low. This leaves room for short and long term growth.
These wines will be tested in April of most years, meaning the score
can change and the wine price can spike. We will advice and manage
your portfolio so we keep ahead of the news.
Below you can see an example of En Primeur that was released this
year in April called Lafite Rothschild. As you can see from the
graph, once the wine was scored out of 100, the price shot up
dramatically and has increased by over 100% in 6 months alone. This
graph is taken from the Liv-ex, which is the wine market version of
the FTSE 100.
`Example of performances within the market’
These wines below show the top 5 performances of existing
vintages. These wines are called back vintages. These examples are
taken from the Liv-ex, which is the wine markets version of the
Top 3 Investment Wines
Lafite Rothschild 2008
Lafite Rothschild 2000