The Lemon Fool

Does anybody have any experience in investing in fine wine or whisky or if it is something that should be avoided?

Just my opinion - I would change the word investing for speculation. Generates no yield and can be expensive (insurance for bonded warehouses etc.). I have no direct experience, however, a relative has and what he hoped would increase in value hasn’t and is disappointed.

Cheers, OLTB.

I have a little experience of investing in wine. Around 17 years ago I invested around 10k in Claret through a well-known wine merchant. I was advised by a very well-spoken young chap who seemed to know his stuff and his Robert Parker scores. All the wine was bought in bond.

I enjoy a glass of wine but am not an expert and was influenced by a business associate who aimed to pick wine that would double in price so that he could sell half and drink the rest for free.

How did my investment turn out? Here are my reflections 17 years later.

It was fun, as the amount invested was a relatively small part of my pension investments.

I had an early success as the most expensive case (Ch. Lafite) purchased for £1,500 was bought-back by the wine merchant for £3,250 two years later.

Another less valuable case was sold for double what I paid for it after three years.

The wine must be kept properly and, though a little is kept in my wine fridge, I pay £24 a year per case for storage etc.

Some of the other claret I bought appreciated reasonably, but it hasn’t done as well as a typical share portfolio once storage costs are included. There wasn’t much point in selling it, so I am gradually calling it off (paying the tax to get it out of bond) and drinking it.

I served some really nice wine from my stock for a celebration with friends over five years ago and they still talk about the taste.

Conclusions

If I had kept the Lafite for longer, it would have sold for up to £10k. The wine merchant obviously knew what they were doing when they bought it back!

If I had my time again I would have bought a minimum of two cases of each wine. The problem with selling the Lafite back was that I never got to taste it.

If you are pretentious and a bit of a wine snob (what me?) and you go to a fancy restaurant, you can really enjoy reading their wine list without it costing much. “Look at the price of 1996 Chateau Pichon Longueville Comtesse de Lalande - £500 a bottle! I’ve got six left in my fridge”. This means one can just buy a modest bottle to have with the restaurant meal and enjoy the expensive stuff at home.

But to be really honest, now I am 17 years older, if you gave me a blind tasting test, the Comtesse de Lalande would taste nice but I might prefer a wine that cost £20 a bottle.

So is it worth taking the risk? Yes, if you are interested in wine. My experience suggests that a share portfolio might do better. However, then seventeen years on if you want to try that 1996 Comtesse de Lalande you’ll have to pay £500 a bottle in a restaurant.

Good luck whatever you decide

Howard

I have been an “investor” with berry bros. For 15 years, buying now and again. I’ve sold all my killer investments and am now left with 300 bottles of wine, average value £80 but my cost - after those disposals is £20 each. I’ll glut em down at my leisure over the next 20 years or flog them for the £60 per bottle profit.

I would not recommend it as an investment. Treat it as fun money. Looking at my bbr account a minimum of £10k would be required for decent diversification.

As previous poster said the holding costs are expensive and bbr charge 10% for selling, so it’s fairly risky but then I was always prepared to drink the stuff!!!

Thanks all for your replies.

Hello everyone - I am looking to invest a decent wad in some low risk wine/whisky investments. Is there a list of companies anywhere here or could anyone offer any suggestions as to where one would start.

SmartMoney wrote:Hello everyone - I am looking to invest a decent wad in some low risk wine/whisky investments. Is there a list of companies anywhere here or could anyone offer any suggestions as to where one would start.

Berry Bros are an obvious choice. But see above for the risks involved. No wine investment is low risk in my view.* But drinking your investments can be fun.

regards

Howard

* Buying a few £5 bottles from Tesco is low risk of course. But I guess you are considering a £10k investment or more.