Investment
Introduction
Over the years wine investment has evolved from simply buying a few cases ‘en primeur’ and selling some at a profit to pay for the balance. Nowadays, with the emergence of new markets consuming finite supplies of the rarest Grand Crus, investors can make very healthy returns, in some cases outperforming the FTSE 100 Index, gold, property and many other commodities.
This last year has admittedly been more challenging with a drop in demand and softening in prices for the more expensive luxury brands. Fortunately, this is a buyers' market, so a good time to buy at lower prices before the impending upturn.
Investing through L'Assemblage
L’Assemblage has over 25 years experience in supplying the finest wines with the strongest investment track record. First and foremost we are a wine shipper and merchant and not a financial institution. We do not give financial guarantees or predictions on future wine values. We adhere to the Wine Investment Code of Practice and are one of a few UK merchants recommended by independent industry watchdog Jim Budd on his wine investment blog investdrinks.org
The Right Wines
Using our expert knowledge we can propose carefully selected wines that meet our quality/price criteria, which are linked to our tasting results, trend analysis, critic ratings, provenance, market supply and demand. Basically, we simply recommend wines that we would include in our own portfolios.
Provenance is of paramount importance. Most wines we purchase have been bought directly on allocation from Chateaux and Domaines or via their trade distributors. We rarely buy investment grade wine from auction or private cellars, unless we can guarentee their provenance and storage conditions.
Provenance is of paramount importance. Most wines we purchase have been bought directly on allocation from Chateaux and Domaines or via their trade distributors. We rarely buy investment grade wine from auction or private cellars, unless we can guarentee their provenance and storage conditions.
Storage Options
L’Assemblage recommends storage accounts in the leading bonded warehouses in the country. We have accounts at LCB and can set up secure accounts for investors at competitive rates from £13.90 + VAT per case per year pro-rata, including insurance at replacement value. We have coded stock systems in place to track your exact cases, where they have been stored and how they are packed. Closely monitored are the temperature, light and humidity conditions, essential for correct storage. Photos of each case and bottle can be arranged on request.
In Bond Stock
With duty on table wines at £32.04 per dozen, along with 20% Value Added Tax, it is prudent to buy your wine in bond. Then taxes will not erode your profits when it's time to sell.
Buying and Selling
We don’t charge a management fee to investors but just the purchase price of the wine and storage charges (if cellared in our bonded warehouse account). Investors can sell their cases through us later at a competitive price outright or on an agreed brokerage basis of 10%.
Ideally investors should think of their portfolios as at least 3-5 year investment plans. Wine is generally classified as wasting asset so, as a vintage is depleted overtime, the market demand will push up the value of that wine. There may be market opportunities to maximise profits within the first 5 years but when these economic situations arise we will inform you. It is important to see wine not just from a wine merchant’s point of view but as a commodity that is performing well, because strong profits are achievable when well advised.
THE PROS AND CONS OF WINE INVESTMENTS
The Benefits
• Wine is a tangible asset that is physically available in your own bonded account fully insured. It is not just a piece of paper like a share certificate.
• The value may rise with demand overtime as supplies dwindle. Wine is made in limited quantities and a château cannot go back and re make more of a popular back vintage.
• By buying and selling in-bond investors can maximize their returns by deferring duty and VAT.
• Over the last 25 years we have seen a complete revolution in global demand for the finest wines. Newer markets such as China, Brazil and Korea are learning to appreciate and demand the most prestigious wines the wealthier they become.
• After some of the worst recession years ever, investors are looking for other alternative investments to equities. Fine wine, like gold, diamonds and art are rare luxuries that investors can more readily control.
• The value may rise with demand overtime as supplies dwindle. Wine is made in limited quantities and a château cannot go back and re make more of a popular back vintage.
• By buying and selling in-bond investors can maximize their returns by deferring duty and VAT.
• Over the last 25 years we have seen a complete revolution in global demand for the finest wines. Newer markets such as China, Brazil and Korea are learning to appreciate and demand the most prestigious wines the wealthier they become.
• After some of the worst recession years ever, investors are looking for other alternative investments to equities. Fine wine, like gold, diamonds and art are rare luxuries that investors can more readily control.
The Pitfalls
• The wine investment market is not regulated like other financial institutions. L'Assemblage are pleased to be recommended by independent industry watchdog Jim Budd as one of the reliable twenty UK suppliers of en primeur and investment-grade wines.
• There are cowboy wine companies out there who will pressure sell wines that are inappropriate or ridiculously overpriced and make promises that they cannot deliver. As with all investments, one needs to do their research before giving away their hard earned cash.
• Fine wines have been fetching record prices but it is essential to make the correct choice in the wine selection and timing. Carefully consider the expert advice given and don’t assume that just because a wine merchant has been around for 200 years that they will offer you the best price and advice out there. Such merchants also need to shift their allocations of less desirable wines.
• As mentioned earlier, provenance is of paramount importance. With record prices and new markets there is an increased risk of receiving fake wines and poor condition stock that has been roaming around the world passing through many hands. Here at L’Assemblage we are particularly carefully when we source our wines.
• There are cowboy wine companies out there who will pressure sell wines that are inappropriate or ridiculously overpriced and make promises that they cannot deliver. As with all investments, one needs to do their research before giving away their hard earned cash.
• Fine wines have been fetching record prices but it is essential to make the correct choice in the wine selection and timing. Carefully consider the expert advice given and don’t assume that just because a wine merchant has been around for 200 years that they will offer you the best price and advice out there. Such merchants also need to shift their allocations of less desirable wines.
• As mentioned earlier, provenance is of paramount importance. With record prices and new markets there is an increased risk of receiving fake wines and poor condition stock that has been roaming around the world passing through many hands. Here at L’Assemblage we are particularly carefully when we source our wines.
Other financial institutions and traditional independent financial advisors (IFAs) may try to dissuade investors from fine wine investment by exaggerating the high risk factor, lack of regulation and the fact that you cannot put fine wine easily into a SIPP.
In actual fact, fine wine is a safer harbour than many investments and, as it is enhanced by a favourable tax treatment of profits, deserves inclusion in an investor’s portfolio.
In actual fact, fine wine is a safer harbour than many investments and, as it is enhanced by a favourable tax treatment of profits, deserves inclusion in an investor’s portfolio.
How do I get started?
L’Assemblage will be delighted to give you expert advice from a knowledgeable, highly trained team acquired over 25 years of trading in this exciting era of fine wine investment. We can offer highly competitive buy and sell prices and a bespoke service. Please contact us in the first instance.