With quality wines being premium assets, we at Bar A Vin understand the importance of you making the right decisions with your wine investments. Contact us today to liase with our team of highly trained professionals. In the secure, well-informed investment environment that Bar A Vin aims to cultivate, we will guide you on your wine investment journey, with the aim of letting YOU reap the best gains.
1. Purchasing en primeur wines and investment wines
2. Wine brokerage
3. Portfolio management of wines
Wine investments Basics
Wine has been an alternative investment class for the shrewd and knowledgeable investor for many years. It has been used to diversify the portfolios of these investors.
Steady and Impressive Returns
The historical trends have indicated annual returns in the region of 12-15% over the past 20 years. The Liv-ex 100 Index has been tracking the performance of the top 100 investment grade wines that are traded since 2004.
The graph extracted from liv-ex below shows that the wine index has consistently outperformed the FTSE 100 over the last 5 years.
In the financial crisis at the end of 2008, wine prices have maintained their resiliency.
Fixed Production set by French Laws
Investing in Bordeaux wines is consistent with the basic principle of economics. There is limited supply as the geographic area designated for Bordeaux is fixed. Each of these chateau’s wine production is limited by French laws and is monitored by the AOC (Appellation d’origine contrôlée). In fact, in recent years these winemakers have actually reduced production in order to increase quality.
During challenging periods of economy (including periods of high inflation), there is a flow of money from paper assets into tangible products like wine and gold. Thus, during bad patches in the economy, wine prices manage to maintain their resiliency (occasional dips like in end 2008 do happen but recover quicker than other asset classes). During good times, people will drink fine wine, thus reducing the supply side of these investment grade wines.
Enjoy Free Blue Chip Wines
Most wine lovers would love to be able to do the above. For instance one could buy a case of blue chip wines and store it for a couple of years. After that one can sell part of the case to get the remaining wines free. Alternatively, the profit made can be used to purchase younger wines for profit.
Increasing World Wide Demand
The amazing growth of previously untapped markets like China, Far East, South America, Russia and India have contributed greatly to the robustness and growth of the wine investment market. These countries have been affected less by the recent downturn compared to the West.
As an example, China has seen its consumption grow by 65% between 2005 to 2008. Consumption of wine in China in the early 90s was nearly negligible. The annual consumption around 2009 was about 0.31 litres per adult per year (visually it is about 2 large glasses). As a comparison, the consumption in UK is about 27 litres and France is about 60 litres. Theoretically, if consumption in China reaches 7 litres, all the wine produced worldwide would be needed to satisfy their demand.
No Management Fee
Our Company does not charge a management fee. The only cost would be the storage fee based on the prevailing rate of a reputable bonded warehouses.