I’ve been following several threads those last few days on wine as investments and the effect of the financial crisis on our wine buying.
All hell broke loose a few days ago when the very respected Decanter.com mentioned a couple of wine investment seminars. One of their readers, Tim Hartley, fired really fast: “Normally investment, even if made for essentially selfish reasons, offers benefits by way of creating or sustaining employment. I do not see how investors in wine, inevitably of a type which is at the top end of the market and would be sold anyway, can offer any public benefit. Indeed by hoarding the wine and/or driving prices up, they align themselves thoroughly against the interests of those of us who seek to buy wine for its proper purpose and would like to be able to buy the odd bottle of really great wine from time to time.”
“Driving prices up” is the main concern of other readers, but some argue that buying young wines is good for the wine industry: “The complaint is frequently heard that fine wines are consumed too young. Making mature wine available in the marketplace is the final outcome of the investment process”, stated Hugo Rose, MW. Tim Hartley objects that “many investors seem only interested in a quick profit – buying en primeur and selling long before the wines are mature at a price which simply, and understandably encourages the growers to believe that they have under-priced their wine and that the market will bear a higher price from the outset.”
The auctions are a good way to evaluate the evolution of the market. The older vintages of great wines, whether European or American, are always very much sought after and are very expensive. What’s been slowing down lately is the flow of younger vintages, sometimes over-priced when put on the market and therefore more difficult to sell at the moment.
Bottom line? Buying “futures” or younger vintages is indeed a way of investment. Some people do it for speculation and think their wines will bring them high profit in the next ten years. As a certain Antoine Dreamer puts it on the decanter.com page, “As a wine amateur, I am happy that investors are putting their money to buy and pay storage for wines that need to mature, and I am only too happy to be patient and wait to buy back from them when the market has dutifully crashed! Thanks a lot! I am pretty confident that there will be a window of opportunity in the next few years to buy Bordeaux/Bourgogne 2005 for a dime!” Who knows?
But investing in wine can also be done for enjoyment rather than for profit. I know passionate collectors able to buy the best wines and let them mature in their cellars for decades. They know they won’t enjoy them but they are happy to think that their children, grand children and sometimes great grand children will enjoy them.
Who’s right? Who’s wrong? I don’t know. Do you? What’s your stake on this subject?