Investing in bottles of wine, is it a good investment?
Investing in bottles of wine, here is a pleasure investment that tempts more than one lover of good things, which is moreover an epicurean. This investment is certainly a niche market, but it has the advantage of being 100% French, the most expensive wines being produced on our territory.
So, how to invest in wine? What profitability can you expect? Tips and advice for building a wine cellar like no other…
Two different ways to invest in wine bottles
Buy your own bottles of wine
This is the solution that immediately comes to mind. Unearth good deals in your supermarket, at your wine merchant, during a tasting in a castle, while on vacation in Bordeaux or the Jura…
What dream on paper and offer a little escape, mixing the useful with the pleasant. Nevertheless, an in-depth knowledge of the wine market is necessary to find the best bottles, those that sell for gold.
To this end, you can take oenology courses, follow the latest wine news on the Internet, obtain reference guides (La revue du vin de France, The Hachette guide to wines and champagnes, the Parker guide to the wines of France, The wine spectator guide), etc.
Join a wine land group
Investing in a wine-growing land group means buying shares in a civil company that owns one or more areas intended for viticulture and viniculture. The exploitation is then entrusted to professionals of the vine by a specific long-term lease.
In return for your investment, you are, as a partner, paid each year, if the results are positive, either in cash or in a bottle of wine. It is of course the second option that we will retain here.
Note that this type of investment is recommended for the long term, over a minimum of 7 years. In addition, it opens the right to an income tax reduction equivalent to 18% of your investment. This reduction is granted up to a limit of 9,000 euros for a single person and 18,000 euros for a couple, which is equivalent to holding shares of 50,000 euros and 100,000 euros respectively.
Don’t forget the essentials
In addition to the choice of grape varieties, appellations, vintages and the nature of the wine (white, red, champagne), you will have to be attentive to your investment and ensure that it increases in value over time.
To do this, take into account an essential element for an ideal wine: ageing. And to age it properly, it is necessary to respect a high humidity level (around 60% approximately) and a constant cool temperature (around 12 degrees approximately). A well-appointed wine cellar, whether natural or artificial, is therefore essential to maximize your investment.
Whatever your choice, whether you prefer to buy directly or via a wine land group, also remember to insure your bottles of wine in the event of damage. A very useful extension or option, which is offered to you by most home insurance contracts.
What profitability can be expected from an investment cellar?
If investing in bottles of wine is a pleasure for lovers of good food, we must not lose sight of the purpose of an investment, namely to get rich. Wine, like other unusual assets, is a smart way to diversify your wealth, provided you do not exceed 10% of the portfolio.
If the Burgundy red Romanée-Conti grand cru, vintage in 1945, sold for 482,000 euros a bottle in 2018, during an auction organized in New York by Sotheby, this remains exceptional.
Nevertheless, this example among others makes it possible to establish some essential criteria for your bottles of wine to increase in value:
The scarcity of bottles,
The initial price of the bottles,
The quality of the conversation
The decrease in inventory,
The prestige of the appellation,
The year of bottling…
Add to that a little luck, a historical event around the history of your bottle, and you can expect significant added value.
However, the wine market is subject to high volatility, one can reasonably expect a return of around 4% per year, with good diversification of one’s cellar. Storage and conservation costs must also be taken into account.
What if your nectar does not reach the expected price?
As you will have understood, investing in bottles of wine is above all a market reserved for enthusiasts, as can be Swiss watchmaking, works of art or vintage cars.
It requires rigor, love and a good dose of knowledge. We don’t speculate on a single bottle, we build up a cellar to make our guests pale and pass on from generation to generation.
Then, when the bottles in your cellar are ready to drink, but do not perform well enough for a winning resale, this disappointment is quickly forgotten. How ? By drinking the bottle of wine of course, with delight, and moderation!