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Back to news listHow to invest in wine
By Emma Wall
Telegraph
19 Jul 2011
Unlike other luxury items, such as Rolex watches or Aston Martin cars, the supply of fine wine is fixed.
Wine is a unique asset. Unlike other luxury items, such as Rolex watches or Aston Martin cars, the supply of fine wine is fixed. If demand for a Rolex or Aston Martin increases, more can be made, but fine wines have a set production number - once the grapes are picked, no more vines can be planted, and geographical regions are controlled by law.
Fine, investment-grade wine, is considered to be only the top 50 to 100 traded wines, although some go further and specify that only those from chateaus in the Bordeaux region qualify.
Either way, wine production is controlled and cannot be increased by demand.
The supply of those top 80 wines has been the same for the past 200 years. In fact, now there are less due to quality control. Two centuries ago Rothschild produced 27,000 cases a year, now it's 19,000.
Not every year produces an investment-grade wine either - only three or four years out of 10 are usually a good vintage.
Unlike any other alternative investment, supplies of past vintages invariably dwindle. While it is in the bottle your investment is improving all the time as bottles are being uncorked to drink.
This tight supply is matched with an unwavering demand. While European and North American investors and oenophiles have always had a healthy appetite for fine wines, in the past five years an Asian market has emerged.
First time wine investors are best leaving the bottle selection to the experts. Wine merchants such as Berry Bros & Rudd (www.bbr.com) or Bordeaux Index (www.bordeauxindex.com) will tailor a portfolio for you depending on how much you want to invest, your risk profile and how long you want to invest.
Most wine merchants will store and insure your wine, with annual fees varying for the size of your "cellar" and the merchant. This means your collection needn't be hampered by the size of your basement.
Alternatively wine enthusiasts can invest in an investment trust or unit trust that, instead of holding equities, holds fine wine. Ask your adviser about The Wine Investment Fund or The Fine Wine Fund if this appeals.
TAX BREAKS
Wine investment is not liable to capital gains tax (CGT), because of a tax regulation called the "Wasting asset rule". This decrees that if an asset has a life of 50 years or more no CGT is payable on it.
On top of your annual capital gains tax allowance of £10,600, there is an added exemption for jewellery, art and antiques worth less than £6,000.
Ian Dodd, SurreyI was utterly thrilled to receive £13,000 into my account this month, having invested £5,175 with Albany less than a year ago.
November 2010
K OlivierI have recommended Albany Portfolio Management to many of my friends and that is testimony in itself as I do not do that lightly. I will continue to highly recommend them as I found them to be honest and hard working with a cutting professional edge sadly lacking elsewhere in the industry
E PrzygrodzkiI have found dealing with APM to be hassle-free, offering time and sound advice to the wine novice which I certainly am. The recent invitation to lunch at Brooklands [APM's storage facility] was a real treat...
E Przygrodzki...It is good to be able to put faces to the names of those we are dealing with and very interesting to be able to visit the 'caves' where our wine is stored. It was also rewarding to meet some of the fellow investors. A real cross section of people from all walks of life.
B GlassI discovered Albany Portfolio through a favourable article in Moneyweek. From the outset the team have been most helpful in advising me in this new area of investment for me...
B Glass...I am regularly kept up to date by regular emails and when there is especially interesting propostion by phone. I am delighted with the performance of the portfolio that I have built up in the last eighteen months and look forward to developing it further.
D RicciardiI have always been interested in wine mainly as a drinker, but also interested in its history, so after some very good detail from Albany I invested in Chateau Latour. I received a very nice certificate with all of my details on it and all of the relevant numbers. In that time, 2 years my investment has doubled which I am very pleased about
P AleyIt is always a pleasure dealing with APM. All its staff are very helpful, polite and knowledgeable and offer advice in a balanced manner. It is easy to trade (selling as well as buying!) and James and David are always happy to chat about my portfolio...
P Aley... Customer care is excellent. The latest and best wines are usually available with reasoned advice about why and when to purchase and at competitive prices. Thank you and well done APM!
I McKinnesAll of the APM team are highly professional and knowledgeable without a hint of the hard sell we have encountered elsewhere.
A FishleighI have been impressed by the advice received from my advisers in Albany Wine who combine a "gently gently" approach with professional fine wine expertise which has been very much appreciated. I would recommend them to other wine investors.
E PrzygrodzkiI was recommended APM by a friend and have now passed on my recommendations to my own friends as the number one company to use if you wish to invest in wine. The company has a sound backing offering the confidence an investor needs.