By Matthew Cooper
Wine Buyer, Ellis of Richmond
Originally published 13 January 2009
Have you got the bottle?
I wish I had listened 15 years ago when my pension advisor, upon
retiring, suggested that I would be better off building up a cellar
of fine wine than continuing with regular pension contributions.
How right he was.
Until October of 2008, the fine wine market had enjoyed continuous
and spectacular growth for more than a decade. The market for
trading the 'blue chip' wines has been considered immune to
the fluctuating financial markets as wealthy new investors from
Eastern Europe and Asia have been clambering to secure allocations
of the World's most exclusive fine wines, price no
object.
Global recession has forced many private and corporate investors to
sell their portfolios of wines (most too young to be drunk) and the
market is now flush with young at up to 30% below their October
value. Yet older vintages, where little remains to be consumed,
have been holding their value firm.
My tip is to invest for the long term, seek good advice and
select the best vintages, from the best estates. The 21st Century
has already yielded two 'vintages of the century' 2000 and
2005 and these are readily available. The 'blue chip' wines
are produced in relatively tiny quantities (Château
Pétrus yields just 4,000 cases per year and Ausone a mere
1,500 cases) and with a potential for longevity, they make the
wisest long term investment. This means the Bordeaux first growths;
Châteaux Latour, Lafite, Margaux, Mouton Rothschild and Haut
Brion, Pétrus of Pomerol, and the elite of St Emilion;
Cheval Blanc, and Ausone.
Investment in fine Burgundy is rather more difficult. Apart from
the wines of Domaine de la Romanée Conti which always
attract a premium (even if you can afford the £100,000 per
case for Romanée Conti, only 6,000 cases are made each
year), Burgundy is a potential minefield of inconsistency and
disappointment. Perhaps more attractive is the growing trend to
invest in Vintage Champagne? Investment is limited to the prestige
Vintage cuvées of Krug, Salon, Bollinger, Dom
Pérignon and Louis Roederer Cristal. These wines are only
made in the better years and offer 10 to 20 years of maturation
potential, during which the scarcity increases the value
accordingly.
Having dusty bottles in the cellar is a more secure way of keeping
your money safe from rogue investment funds and the process of slow
maturation provides the added enjoyment of anticipation to some of
us wine anoraks. Not only could it provide your pension but the
prospect of an enjoyable tipple along the way.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.