Why should I choose to invest in wine?

Wine is a natural product which value increases with time for the following reasons :

  • A limited production: Châteaux cannot produce more bottles than allowed by the PDO, their vineyards are not expandable (terroir effect) and each vintage is a new venture (weather conditions). The demand for certain Grands Crus is therefore naturally higher than supply.
  • A scarcity that is growing with time :  As wine is being consumed it becomes increasingly rare.
  • Wine improves with time : Wine is one of the few products that gain in quality with age (until it reaches its consumption peak). This increase in quality often means an increase in value.
  • A luxury product , that, considering the above-mentioned points, makes high transaction prices acceptable and responds to a strong international demand.

However to make their wine investment a success investors need to be vigilant because :

  • The above-mentioned characteristics do not apply to all wines; one has to be very careful when selecting the wines that will be part of their portfolio.
    They are two risks which are inherent to a wine investment:
  • The risk of capital loss that can be mitigated by getting the best purchase price.The risk of not selling the wines that can be diminished by giving mandate to a specialist to resale the wines on your behalf.
  • There isn’t any official wine trading index, each company offering a wine investment service can establish their own wine index and can dangle attractive returns that are not in line with the reality of the consumption market. We recommend opting for a company offering realistic returns based on the wine natural appreciation (with time and not on a temporary speculative phenomenon).

Convinced that investing in wine can be a good alternative investment? Invest-in-wine.com advises you through your wine investment and helps you understand the issues and the risks you need to pay attention to. Invest-in-wine.com also helps you identify the selection criteria that will allow you to choose the offer that suits you best.

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What is the purpose of your wine investment?

Who can accompany you through your wine investment?

Who is accompanying you ?

Yourself

Management company

Business Intermediary(Not Registered)

Registered Business Intermediary

Investment support

« physical wine » movable asset type

« paper wine » fund type

« physical or paper wine » movable asset type

« physical wine » movable asset type

Description

You are a wine connoisseur, you can store your wines at home and you want to manage your cellar by yourself, you have to manage your investment from A to Z.

You invest through an investment product called «funds", registered by the Financial Markets Authority. This is the most widely spread investment to date. This fund may possibly hold more alternative assets (gold, silver, art, wine) and hold a part in cash for cash flow purpose. You will hold a percentage of the fund.

The Business Intermediary (BI) system has been in place for just over 5 years.The investor delegates to an BI all or part of the following: -Wine selection, -Wine Purchase,storage , -Wine Management and Information , -Wine resale , -Delivery. Each investment is segregated per customer; So that, the customer can make their own choices between consumption and resale.

These are Business Intermediaries registered with the AMF as "Intermediary in Miscellaneous Goods» (IMD). The first IMD was registered on August the 26th, 2014. Warrant of quality & seriousness, these companies offer much better protection as unregistered BI or as investment funds.

Pur investissor

Wine amator

Patrimonial pleasure

Terms of access

No minimum

100 K€

No minimum, depends on the intermediary

€ 1000, depends on the intermediary

What are the different wine investment possibilities?

There are two types of wine investments:

“Deliverable wines”.
“En Primeur wines “.

What is a En primeur wine investment in Bordeaux ?

 

In Bordeaux, where the Primeur system was created, the term “Primeur” is the short version of “vin vendu en Primeur”, that is to say, a wine which is sold before being bottled while still being raised in wooden barrels at the Château.
One must not mix up the Bordeaux Primeur wines with a “vin Primeur”, such as Beaujolais nouveau, which is a wine that is already bottled, sold very young and that needs to be drunk within a few months after the crop.

The Bordeaux Primeur system was created almost two centuries ago and has been proven successful ever since.

The sale of “Bordeaux Primeur” wines is reserved to professionals such as Châteaux, merchants or brokers (mostly coming from the Bordeaux market place). Traditionally, the Bordeaux Primeur week takes place in April (So in April 2015 were sold the Bordeaux Primeur vintage 2014) and gathers almost 400 châteaux, 5,000 wine merchants as well as importers, experts and journalists coming from all over the world to taste the wines of the new vintage. At the end of the Bordeaux Primeur week the referenced prices of the new vintage are published.

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What is a deliverable wine investment ?

 

The deliverable wine investment is the most widely spread one. It involves buying a wine considered as “cheap” to sell it back at a “more expensive price” in the short or medium term. This is a classical “trading” process and it can even be assimilated to speculation if the wines a resold from customer investor to customer investor.
Sources of supply are of all types: merchant, wine shop, e-commerce, retail, private cellar, auctions, etc.


What are the advantages of a en primeur wine investment ?

 

  • The wines can be booked in advance to avoid any shortage, especially if we want to buy very popular wines or wines with low volume production.
  • The En Primeur wines are purchased directly from the Châteaux, with no intermediary. The wines handling is therefore reduced to its minimum to avoid altering their preservation; no doubt either aboutthe origin of the wines.
  • When Purchasing En Primeur wine you also save on the wine future final resale price (price that the wine will be sold at 2 years after the Primeur campaign when it is bottled and becomes a “deliverable” wine available on the market). By purchasing at merchant’s conditions, the number of intermediaries is minimized and the purchase is done in the best market conditions. As part of a wine investment, the purchasing phase has to be carried out with the resale in mind. A resale that will be optimized by purchasing En Primeur wines at the best possible prices.
  • En Primeur wines are the only wines that can be purchased at a fixed price without competition law. Indeed, the En Primeur prices are set by the Châteaux.
  • The En Primeur Purchase shows the same characteristics as an “aging purchase”. This is a purchase in which the conditions shall be decided upon on the day of the transaction when the transfer of ownership, the delivery and settlement of the price will occur at a later date agreed between the parties..

Wine investment

Deliverable wine purchase

En Primeur wine purchase

Investment duration

Short, middle or long term

Middle or long term

Potential ROI

Yes but only based on speculation. The yearly return can be extremely attractive.

Yes as we get the natural valuation of the wine rather than the speculative one. The cumulative return is better.

Shortfall risk

Yes

Yes, but the risk is less

Many investment opportunities

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Castles

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Vintage

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Resale

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Potential rental

Which Châteaux should I choose?

The Premiers Crus wines are not necessarily the wines that offer the best performance. Their purchase prices are high and their potential capital gain will be lower than a wine from a “Rising star” (Châteaux which notoriety is growing) bought at a cheaper price and that will leave “room” for a higher potential capital gain when being resold.

A “Rising star” wine can therefore have a higher return than a Premier Cru. However, the demand for the Premiers Crus is such that we can sell those wines rapidly (this is called liquidity) which might not be the case with “Rising stars”…

invesitssement

Catégories

Rising stars

Seconds Wines

Premiers Crus

Description

Château with a high potential and rising notoriety.

Second wines of the Premiers Crus wines which are listed (1855, Saint-Émilion) or wines which notoriety is well established.

Premiers Crus Classés of Bordeaux, of Burgundy or from other origins and which have a worldwide notoriety.

Performance Potential

Liquidity


The investment amounts will naturally have an impact on the portfolio profile you choose. Indeed, it will not make sense to want to invest in Premiers Crus only if your investment amount is less than € 10 K. In that case, the investor would hold a small and not enough diversified portfolio and will therefore be highly exposed to “Châteaux/vintage” risks.


Key success factors of your wine investment

performance
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Performance

01

Investment Product

Select an investment product in which you believe

02

Purchase

Optimize your Purchase and diversify your portfolio

03

Market Quotes

Avoid speculation

04

Investment Cost

Assess the Global investment cost (fee, taxation)

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Protection

05

Resale

Control the resale phase

06

Regulation

Secure all regulatory and legal aspects

07

Insurances

Trust : recommendation, renowned players of the wine industry, Market authority’s registration

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plaisir
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Pleasure

08

As a bonus : pleasure

  • Principle: Create your cellar and finance your consumption by reselling part of your cellar.
  • The Only way for a customer to recover all or part of their wines for consumption is for their wine investment to be administered via a management mandate. This point needs to be checked with the company with whom you will invest.

Contact us and get your free evaluation grid


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