bonded storage facility like London City Bond or Octavian Vaults
will store cases of wine in optimum temperature, light and humidity
controlled conditions. Wines need to grow and develop, and perfect
storage conditions are key to maximising the re-sale potential of
wine. The majority of UK storage facilities are 3rd party and some
have existed for more than a century.
Annual storage cost between £10-25 per case, but most investment
firms will offer storage as part of their services.
Investment wines should be stored ‘In Bond’, which
essentially means it is ‘In Transit’ – not liable for VAT.
Wines stay like this between year 1 and year 50 sometimes and change
hands up to 10 times without ever actually moving. When someone
eventually removes the wine from bond for consumption, they will pay
the VAT and Duty.
By investing in wines, collectors actually own the stock, a tangible
asset that always retains a worth. Unlike stocks and shares that
boil down to a piece of paper, investors in wine own something that
carries an intrinsic value.
Wines should always be stored under the owner’s name – even if they
are in the brokerage firm’s trade account, as this will ring-fence
any cases in the event that the firm ceases trading.