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26. Is wine a good investment?

We all like to enjoy a glass…
but is wine a good investment?

Image credit: Winemind

Well isn’t that the million dollar question!

Many of us believe that wine generally belongs to a select group of consumer items with the potential to appreciate in value over time but is this really the case?

While a small percentage of wine is suitable to be held as part of an investment portfolio, in our opinion the vast bulk is not.

The past decade had seen a number of scams purporting to offer solid investment opportunities in the premium wine market. The lure of inflated potential returns combined with overly enthusiastic wine rating systems has seen many superannuation funds and private investors lose significant amounts of money.

The key issue is that the quantity of great wines that might appreciate in value is so limited, that it is near impossible to acquire enough of it to create a viable business model to make money.

Some wines do go up in value and net profits are achievable with a careful and informed selection – but it’s more of a by-product of buying limited highly sought after wines. Some of these are Australian and others old world like Bordeaux and Burgundy. Like any collectible – it works for some very knowledgeable people with higher risk tolerance. Unfortunately though, most stories have a sad ending.

If you’re still not convinced and still considering, be sure read some good blogs on wine investment scams to educate yourself first. As the old saying goes, if it sounds too good to be true then it probably is.

Our advice is, if you have a case or two of Grange tucked away as an investment, is that it may be wise to reconsider. Either plan to drink it or sell it and invest in something better like a long term managed fund or some shares. Generally wine is for drinking short or long term so stick to that and you won’t be disappointed.

Remember that even if you are storing wine over time simply for your own personal enjoyment (rather than investment), you must still keep it properly cellared. As Jancis Robinson states “wine is relatively sensitive to storage conditions and is one of the very few consumer products that can improve with age”. It is crucial that wine is stored in perfect conditions if it is to mature as the wine maker intended. After all there is no greater pleasure than opening a well cellared wine with some age that is “fresh” and lively rather than that dull sensation you can experience with poorly stored wine.

If you need help selecting a wine cabinet to suit your collection or designing / building a cellar that not only looks amazing but performs its crucial role of protecting your wine, we have a specialist team that can help. Please call 1800 733 621 for more information.

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