Investing in wines
Fine wine matures once bottled, and improves with age. A limited amount is produced every year and as bottles are consumed the supply of the wine becomes smaller. As supply diminishes, demand generally rises as the wine matures. Moreover, demand and interest in fine wine is growing around the world and supply of the top wines cannot be increased. The growing markets around the world are: Hong Kong, China (mainland); India and Brazil. You do not need to have much knowledge in the subject, leave that to us. However, we strongly recommend seeking advice when investing in wine as not all well-known wines are suitable for investment, that’s why at Blanco & Gomez we will do its utmost to ensure success for your investment.
The main advantage to invest in wines against others investments, it is the fact that 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. Wine is an easily transferable asset; there is an established fine wine market and a thriving auction market. In the worst scenario wines that do not perform financially as well as expected can be consumed and enjoyed. Please note that this is an investment market like any other, so be aware that prices can go down as well as up.
When it comes to the investment terms, my suggestion is that 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 even better.
Only specific wines will tend to accrue value and these wines tend to be expensive. I strongly suggest you, only ever invest in the top wines of Bordeaux and a handful of wines from Burgundy. Whilst other parts of the world make great wines, the global secondary market has limited demand for these, so sticking to the best from Bordeaux is realistically the safest strategy. For investment purposes you're better off spending £1,000 on a case of a big name than buying five £200 cases.
In order to make the most of your money, you should buy En primeur (literally ‘wine futures’) is the method of purchasing wines before they are bottled and released onto the open market. It is sometimes called Bordeaux Futures or Liquid Investment. Wines can only be purchased by the unmixed case (12 bottles, 24 half bottles, 6 magnums) and are usually delivered 2-3 years after the vintage. There are no limits to wine investing, though the current prices of the top wines is such that one really should start with £7,000 to £10,000.