Our Q4 report, analysing the trends that shaped the fine wine market over the past three months, <a href="https://wp.winecap.com/wp-content/uploads/2023/01/Q4-Report-2022.pdf" target="_blank" rel="noopener">is now available to download</a>. The report also provides a summary of the year in fine wine and a look ahead to 2023, accounting for the macroeconomic environment and core factors such as inflation, currency moves, new releases, supply, and levels of demand.
<h2>Fine wine shows remarkable resilience in 2022</h2>
The fine wine market remained bullish in the face of severe headwinds, which only started to impact its performance in the final quarter. 2022 brought a perfect storm of pandemic, war, inflation, climate change and unsteady politics, which led currencies, bonds and equities spiralling downwards. But fine wine did not experience any of the volatility that affected mainstream markets. Instead, all major fine wine indices finished the year with increases. Rare Burgundy and vintage Champagne enjoyed soaring demand and peaking prices.
<img loading="lazy" class="aligncenter wp-image-1265" src="https://wp.winecap.com/wp-content/uploads/2023/01/Liv-ex100vsmainstreamequities-375x224.png" alt="graph of liv-ex 100 performing well against mainstream equities" width="800" height="478" srcset="https://wp.winecap.com/wp-content/uploads/2023/01/Liv-ex100vsmainstreamequities-375x224.png 375w, https://wp.winecap.com/wp-content/uploads/2023/01/Liv-ex100vsmainstreamequities-768x459.png 768w, https://wp.winecap.com/wp-content/uploads/2023/01/Liv-ex100vsmainstreamequities.png 1030w" sizes="(max-width: 800px) 100vw, 800px" />
<h2>What to expect in 2023</h2>
If 2022 was all about Burgundy and Champagne, 2023 is likely to see the return of more subdued market players, which offer value and quality. Stability will be a key theme in the new year as the economic outlook remains uncertain.
Although fine wine might experience a temporary drift following its bull run, many wines continue to set trading records. Among them in Q4 were some of the critics’ ‘wines of the year’ such as Talbot 2019 and Lynch Bages 2014. Bordeaux remains the market’s driving force, with heightened demand across both ‘on’ and ‘off’ vintages. But demand is also getting broader, with more wines considered investment-worthy than at any other point in history, be it grower Champagne, the Rhône, Italy, California or further afield.
WineCap’s independent market analysis showcases the value of portfolio diversification and the stability offered by fine wine. Download our brand new report below for your summary of the past quarter in fine wine.

Q4 2022 | Report

Investments in fine wine have <a href="https://winecap.com/news/increased-global-demand-for-fine-wines" target="_blank" rel="noopener">proved exceptionally popular over the recent years</a>, bringing in new buyers and record trades[1]. And it’s easy to see why! <a href="https://winecap.com/learn/seven-delicious-reasons-to-invest-in-fine-wine" target="_blank" rel="noopener">There are many advantages to investing in fine wine</a>, especially in the current high-inflation environment. However, before diving in, it’s important to take a step back and consider how fine wine could fit into your overall investment strategy.
Here are six questions to ask yourself before investing:
<h2>1. What is your investment goal?</h2>
Investment goals are unique to the investor. Some people dream of going on a lavish round-the-world trip, while others are simply looking to afford a comfortable retirement. Whatever your personal goal (or goals), take a moment to write it down.
Calculate how much your goal will cost and how much time you’ve got to get there. This forms the backbone of your investment strategy.
For example, if you’re hoping to put down a £150,000 deposit on a property in a decade, and you can afford to put aside £1,000 a month towards it, you will need to find the additional £30,000. This means your investment goal is to generate £30,000 over the next ten years. The way that you approach it depends on your unique time horizon and risk tolerance.
<h2>2. What is your time horizon?</h2>
The general rule is the more time you have, the more risk you can afford to take. Of course, there is always a chance with investing that you may get back less than you put in, but over longer periods this risk is mitigated.
Experts mostly agree that if you will need your money in less than five years &#8211; say one or two &#8211; it’s normally better to put it in a high-interest savings account. If you need it within the next five to ten years, a lower-risk and highly diversified portfolio could be the best option. Blue chip stocks, AAA graded bonds and market index funds could make up the bulk of your portfolio. If you have more than ten years to invest, you can probably afford to take more risk.
Pension fund managers normally follow this rule. Generally, young employees – who have multiple decades of work ahead – will be invested in high-risk illiquid assets. By contrast, those closer to retirement will be transitioned to low-risk, liquid investments.
Time is an important factor to consider as you begin to explore fine wines and consider how they could complement your strategy. As you research bottles, check that the maturity date matches your strategic timeline. Luckily, there are many different fine wines out there to suit different investors. You can <a href="https://winecap.com/wine-track" target="_blank" rel="noopener">effortlessly stay updated on the latest trends fine wine with Wine Track</a>.
<h2>3. How much tolerance do you have for risk?</h2>
Your investment risk tolerance is nothing to do with your normal risk appetite. It’s about how you feel when the markets are volatile. It’s about whether the idea of your investments soaring and plunging in value makes you excited or nauseous. You could be a sky-diving, base-jumping crocodile physiologist and still feel queasy at thought of market downturns.
Figuring out the level of risk you’re prepared to take with your wealth is a crucial part of designing your investment strategy. After all, you don’t want to lose sleep over your investments, they are there to help you dream – not give you nightmares!
Different asset classes can be broadly grouped into different risk levels. On the lower-risk side, there’s investments like gold, property, or fine wine. These tend to provide stable and steady returns over time. On the higher risk-side are assets like crypto assets, high yield bonds, derivatives, or equity in start-ups. These are more volatile in nature, often soaring and plummeting quickly.
In the current environment, <a href="https://winecap.com/learn/is-fine-wine-inflation-proof" target="_blank" rel="noopener">investors looking to mitigate their risk might be interested in inflation-shielding assets</a>. These are usually physical and tangible investments like property, art, gold, collectibles, and of course, fine wine.
<h2>4. How much liquidity do you need?</h2>
If things take a turn for the worse, how much money will you quickly need to access from your investment portfolio? Or in other words – how much liquidity do you need?
Ideally, investors should not liquidate their portfolio before the right time. Doing so could unbundle the entire investment strategy and mean missed opportunities later down the line. For this reason, experts recommend keeping three to six months’ worth of living costs aside in a high-interest savings account. And many will also advocate to have a healthy surplus in a current account too.
However, sometimes life happens, and investors have no choice but to liquidate. Think carefully about how much of your portfolio you would need to sell in an emergency and how quickly you’d need the cash. This is an important part of planning your strategy.
Some assets can be quickly converted into cash. For example, many of the blue-chip shares and funds – such as those on the FTSE100 or S&amp;P500 could usually sell within 24 hours. However other assets – especially those on the private market – can take several weeks, months or even years.
Generally, for fine wine it can take between weeks and months to sell bottles. But it depends on the time of year, type of bottle and asset maturity. With <a href="https://winecap.com/wine-track" target="_blank" rel="noopener">Wine Track, you can keep a close on the demand and prices of fine wine</a>, so that you’re always up-to-date.
<h2>5. How diversified are you? </h2>
Nobel-prize laureate Harry Markovitz famously revealed, “Diversification is the only free lunch in investing”. As you build your investment portfolio, it’s important to diversify your revenue streams. This can help to shield your overall wealth from market shocks and prevent one downturn from slashing the value across your entire investments.
<a href="https://winecap.com/learn/7-under-used-alternative-investments" target="_blank" rel="noopener">Alternative investments &#8211; such as art, antiques, commodities, and fine wine</a> – are often used to boost diversification and provide different sources of returns (hence the name).
Because assets like fine wine derive their value intrinsically, <a href="https://winecap.com/learn/3-rules-for-fine-wine-investors" target="_blank" rel="noopener">they are less affected by the market turbulence outside</a>. They are also traded away from the stock market. This provides a different source of revenue and helps to diversify portfolios.
As you build your overall portfolio, experts recommend aiming for a blend of different asset classes, sectors, and geographical locations. Reaching as far and wide as possible is one of the most effective ways to mitigate exposure to market shocks.
<h2>6. What’s your impact on the world?</h2>
One of the most profound questions for investors to ask themselves is what effect they’re having on the world around them. How their money is invested can make a dramatic difference on the planet.
Fortunately, many vineyards and fine wine investors care deeply about the environment. The <a href="https://winecap.com/learn/how-climate-change-affects-value-of-fine-wine" target="_blank" rel="noopener">quality of grapes is closely linked to the climate</a>, and many wineries are working hard to adapt and mitigate the effects of the crisis. As an investment that thrives on the prosperity of vines, <a href="https://winecap.com/learn/5-ways-fine-wine-investments-good-for-environment" target="_blank" rel="noopener">there’s a strong case to be made that fine wine is an ESG investment</a>.
As you build your portfolio, consider carefully what your wealth is being used for and whether you agree with it. Your choice of investment gives you power and influence, use it wisely.
<a href="https://winecap.com/learn/how-does-fine-wine-react-in-a-recession" target="_blank" rel="noopener">Discover more about how fine wine reacts in a recession</a>.
&nbsp;
[1] Source: <a href="https://www.liv-ex.com/2022/11/number-wines-traded-surpasses-2021-record/" target="_blank" rel="noopener">Liv-ex</a>

6 Questions to Ask Yourself Before Investing in Fine Wine

Fine wine and spirits sales at Sotheby’s hit a record-beating $150 million last year, an increase of 14% compared to the year before. 
69 wine and spirits auctions were held by the top auction house during 2022, which represents 30% more than in 2021. This new record for fine wine and spirits sold at auction doesn’t include private sales and retail sales.
The main revenue source was fine wine: delivering a total of $121 million last year. Spirits also contributed double-digit growth of 15% year-on-year with a total of $29 million, underlining the rising interest in investment-grade whiskies and fine spirits. 
One particular highlight included a unique assortment case of 12 bottles from the 1990 vintage of Domaine de la Romanée-Conti which sold for an estimate-breaking $118,750.
The Macallan The Reach 81 Years Old single malt, an incredibly rare special edition, went on auction in September at Sotheby’s in London. It was the oldest whisky ever to be entered into an auction and sold for £300,000 (or $325,740).
In the US, spirits sales doubled: up from $5 million to $12 million. The key driver can be attributed to a stronger demand for luxury bottles.
Asia remains a key focus for Sotheby’s, with the auction house’s 2023 continued expansion plans in the region. Sales in Asia contribute the most to the house’s total revenue from auctions: $54 million. What’s more, the auction house reported that Asian buyers represented 41% of sales by value in 2022.
Commenting on total sales, Yves de Launay, Head of Auction Sales, said: ‘Overall 2022 saw a very strong performance in a very challenging market.’ ‘Bordeaux and Burgundy clearly led the way with an increasing demand for vintage Champagne and rare wines for other regions such as Tuscany or Rhône. Demand should remain strong for the finest and rarest wines in 2023.’
Read about <a href="https://winecap.com/news/christies-london-auction-reaches-over-2-million" target="_blank" rel="noopener">Christie’s December 2022 London auction</a> that reached over £2.12 million in sales.

Sotheby’s Wine & Spirits Auction Sales Top Record $150 Million in ’22

François Pinault, owner of Artémis Domaines, has finalised the acquisition of Champagne Jacquesson.
In February last year, Artémis Domaines took control of a minority stake of 33% in Champagne Jacquesson. At the time there was speculation that a full takeover would ensue later in the year. Managing the Dizy-based operation with his brother Laurent since 1990, Jean-Hervé Chiquet has confirmed that the complete takeover happened in December 2022. Chiquet commented: ‘When we bought back Michael Mackenzie’s shares (in the company) at the end of 2020, we started to think about a new partner and found that Artémis Domaines was interested. We started to discuss options with them and agreed on their arrival as a minority shareholder last February.’
‘Since then, we have had time to get to know each other and, as Laurent and I have no successor in our family, we have decided to put Jacquesson in the best hands possible to guarantee its future and to be sure that our dedication to quality will remain or even be improved,’ Chiquet added. Although he and his brother won’t be actively involved in managing the company, ‘we will continue to supply the company with grapes from our own vineyards and I will stay on as a member of the board but without an operational role,’ Jean-Hervé added.
Located in Dizy outside of Epernay, the Jacquesson estate was purchased by Jean-Hervé and Laurent’s father in the 1970s. The estate dates back to the 18th century and Joseph Krug worked there before he founded his own house in 1843. The brothers have shaken up the ‘Brut sans année’ market with the introduction of their Cuvée 700 concept. Their first release – Cuvée 728 – centred on the 2000 harvest and was released in 2004.
Chiquet, who has previously spoken about his and his brother’s approach, said: ‘The Cuvée 700 concept is unique in Champagne and is the opposite of a non-vintage wine. We seek excellence rather than homogeneity, respect for the character of the vintage rather than its denial, and the preference to create a “house style”, the doctrine most other producers in Champagne follow for their non-vintage blends. Our Cuvée 700 is the only blended wine we produce; it is meant to be the expression of a year and thus each year offers a different identity which we recognise by numbering the cuvée.’
Read more about the <a href="https://winecap.com/news/pinault-familys-new-merger" target="_blank" rel="noopener">Pinault family’s 2022 acquisition of Champagne Henriot</a>.

Champagne Jacquesson Purchased by Pinault Family

For centuries, property has been hailed as the sturdiest of investments. After all, what could be more solid than bricks and mortar? But with the five or six figure price tags, near-constant renovation or service work and gut-wrenching taxes, is it really such a wise investment? In this article, we compare the performances, costs and returns of fine wine against property to see which one works out better for investors.
<h2>What returns could investors expect?</h2>
Investors in fine wine have reaped significant returns, especially over the past years. The Liv-ex Wine 1000, which tracks the overall performance of fine wines, shows how the asset has grown in value by 45% over the past five years alone[1] (at the time of writing). And since the index was created in 2004, fine wines have steadily risen to almost five times their original price. Over the past year, fine wine investors have enjoyed returns of 13.6% on average[2]. While past performance is no guarantee of future returns, fine wine has a strong track record of delivering smooth and stable value for investors.
Property market values are a little more complicated to measure, as they are influenced by politico-economic factors. For example, the 2020-2021 UK Stamp Duty cuts impacted price movements significantly. However, we can still compare returns.
Most real estate investors will opt for a Buy-to-Let property. Depending on the area they select, rental profits generally range from between 3% to 8% each year. 2022 research from Zoopla reveals that UK rental yields are the highest in East Ayshire, Scotland. Here, investors pick up average yields of 8.5%[3]. By contrast – and perhaps surprisingly – the location with the lowest rental yields is the London Borough of Kensington and Chelsea. Despite the average property values of £1.7 million, investors reap just 3.3% profits[4]. Even the highest yielding rental properties are not delivering the superior returns of fine wine.
Comparing like-for-like, the average rental yield for a UK property today is 4.7% annually[5]. By contrast, wine investors have enjoyed returns of 13.6% on average over the past year[6].
<h2>Costs associated with buying and selling</h2>
Unless you chose to buy into a fund, purchasing the investment-grade wine of your choice can take a little longer than trading stocks and shares on the public markets. However, <a href="https://winecap.com/start-investing" target="_blank" rel="noopener">reputable online services like WineCap</a> make the process simple and straightforward.
Signing up to the WineCap platform and linking your desired investment amount takes just a few moments. From there, investors can effortlessly view, track, and purchase the finest wines available. They can even benefit from state-of-the-art analysis tools, and experts are on hand to recommend the best brands. Selling wine with us is just as painless. We are extremely well positioned to trade wine, reaching keen audiences and investors across the globe. When investors sell fine wine, WineCap charges a brokerage fee of 10%.
Buying a property, on the other hand, is almost always a drawn-out and complicated procedure. Investors looking for a buy-to-let will need to visit multiple different properties and locations, requiring time and planning. They’ll also need to deal with estate agents, surveyors, conveyancers, lawyers, banks and possibly mortgage brokers, adding around £5,000 to the cost[7]. Plus, if tenants are already living in the property, it problematic for investors who want to renovate or increase rents.
Selling a property means going back through the same laborious process, especially if the new buyer is part of a chain. It also occurs additional costs such as estate agents fees, EPC energy certificates, conveyancing fees and removal services, adding around £6000 in total[8].
Buying and selling a property comes with a lot more hassle and fees than fine wine. When fine wine is sold using online services like WineCap, a one-off 10% brokerage charge applies. By contrast, when buying and selling a property, investors are inundated with charges and requirements, adding thousands to the bill. 
<h2>Inflation-hedging and interest factors</h2>
Fine wine is <a href="https://winecap.com/learn/is-fine-wine-inflation-proof" target="_blank" rel="noopener">famously inflation-resistant</a>. Over centuries it’s demonstrated that returns are not corelated to the wider financial markets, and over the last years it’s become even more stable than gold. As a scarce and depleting asset, fine wine investments are a promising hedge against inflation.
However, the same cannot be said for buy-to-let mortgages. Unless investors can purchase property outright, they are likely to get hit with annual interest rates of around 5%[9]. Considering that the average property in the UK comes to £296,000[10], mortgage holders will pay out £14,800 each year. What’s more, since 2017, buy-to-let tax relief has been gradually decreasing in the UK. As of 2022, it became zero. Property investors will be feeling the rising interest more than ever.
Inflation and interest rates are closely linked. When inflation rises too much, central banks will attempt to “cool” the economy by raising interest. At the moment, we are in a high inflation environment, and so interest rates are unlikely to drop back to pre-pandemic levels for the foreseeable future. This is bad news for landlords and property investors, but it doesn’t negatively impact fine wine holders.
When it comes to inflation-hedging and interest, fine wine investments have the edge over property. Unless the investor can pay for the entire estate without any mortgage, they will be hit with higher rates and less tax perks. 
<h2>Ongoing maintenance costs</h2>
Some investors already have a temperature-controlled cellar at home. But for those that don’t, there are storage facilities available. Ensuring that the bottles are stored in the right conditions is crucial for maintaining and increasing value.
While storage costs vary from place to place, it’s usually between £10 and £40 for a case of twelve for a year. Some facilities may include insurance, or investors may prefer to purchase it themselves. Investors may also wish to have the wine delivered to a new location, which adds to the overall cost.
If you would like to <a href="https://winecap.com/schedule-a-call" target="_blank" rel="noopener">talk to an expert about fine wine and the maintenance costs, we’d be happy to help</a>.
Investing in property also comes with maintenance charges, which are often far more troublesome and costly. The estate may need renovation, cleaning, plumbing work, building work, decorating and more. Those planning to rent out also need to stay on top of regulations, such as fire safety measures. Many investors will employ a property manager to ensure that day-to-day issues are dealt with quickly, which is a drain on profits.
In addition, properties such as flats often require quarterly service charges, to pay for the communal maintenance, cyclical charges (like repairs) and reserve funds. Most service charges are between £1,000 to £2,000 a year.
Both fine wine and property investments come with maintenance charges. However, the cost of storing, insuring, or transporting fine wine is usually much less than the costs associated with properties.
<h2>Tax considerations</h2>
One of the major advantages of fine wine investments is the generous tax status. Under the UK HMRC, fine wine usually falls under the category of “wasting chattel”. This means that since it needs to be consumed within the next 50 years, it is exempt from Capital Gains Tax (CPT). Investment-grade wine which valued at less than £6,000 is also usually free from CPT. You can read more about the <a href="https://winecap.com/learn/fine-wine-taxation-2022" target="_blank" rel="noopener">taxation rules of fine wine with our comprehensive guide</a>.
However, the same cannot be said for almost all property investments. Property investors in the UK must normally pay stamp duty, capital gains tax and income tax. Buy-to-let investors will need to pay more in stamp duty than other homebuyers, as they have an additional 3% surcharge. And foreign property investors may face yet more taxes from both their own state and the one they are buying in.
Depending on the type of service property investors want to offer renters, they may also take on the Council Tax as well.
Property investors will probably need to pay stamp duty, CPT and income tax. Meanwhile, nearly all fine wine investments are exempt.
<h2>Is fine wine the new property?</h2>
In the current environment, fine wine has many desirable qualities and benefits over traditional property investments. While wine does have some associated costs, they are usually much lower and more straightforward than buying property. And, unlike property investments, the returns on fine wine are not directly impacted by tax, interest rates or inflation.
Perhaps most importantly of all, <a href="https://winecap.com/learn/how-does-fine-wine-react-in-a-recession" target="_blank" rel="noopener">fine wine tends to preserve or increase in value during a recession</a>. It is not linked to the wider economy and government intervention in the same way that the housing market is. On the contrary, in the aftermath of the 2008 housing collapse, fine wine rallied[11].
So, is fine wine the new property? We think it’s better.
&nbsp;
[1] Source: <a href="https://login.liv-ex.com/login?state=hKFo2SBaZlV1Umtsa1hwekZ3dVJqQUEya3JIVUs0UGtWS2ZHWqFupWxvZ2luo3RpZNkgN2RobEEyOHJ3RjVxQlVGVEE2c3Z3d01oZGl1aXNjMTKjY2lk2SAzc2NZcHA4N3VNYlZLSHFrN0FvaHk1NG92ODA0WnBWNg&amp;client=3scYpp87uMbVKHqk7Aohy54ov804ZpV6&amp;protocol=oauth2&amp;response_type=token%20id_token&amp;scope=openid%20email%20profile&amp;audience=https%3A%2F%2Fliv-ex.eu.auth0.com%2Fapi%2Fv2%2F&amp;redirect_uri=https%3A%2F%2Fapp.liv-ex.com%2F%3Ftarget_url%3Dhttps%253A%252F%252Fapp.liv-ex.com%252F%2523%252Fanalysis-tool%252Findices-explorer%252FLX1000&amp;nonce=srgEhLSOlugcei7fQh~k9_SUfwulXq3D&amp;auth0Client=eyJuYW1lIjoiYXV0aDAuanMiLCJ2ZXJzaW9uIjoiOS4zLjAifQ%3D%3D" target="_blank" rel="noopener">Liv-ex</a>
[2] Source: <a href="https://login.liv-ex.com/login?state=hKFo2SBoajdUY1ZDRlhkUjJ6TlQxUk16TEZFZVB2VUM0ZHphY6FupWxvZ2luo3RpZNkgY2Y5ZEF2UzdPMEVGQ3dOSFpLNzZQbFRqSGQ4QXNETXCjY2lk2SAzc2NZcHA4N3VNYlZLSHFrN0FvaHk1NG92ODA0WnBWNg&amp;client=3scYpp87uMbVKHqk7Aohy54ov804ZpV6&amp;protocol=oauth2&amp;response_type=token%20id_token&amp;scope=openid%20email%20profile&amp;audience=https%3A%2F%2Fliv-ex.eu.auth0.com%2Fapi%2Fv2%2F&amp;redirect_uri=https%3A%2F%2Fapp.liv-ex.com%2F%3Ftarget_url%3Dhttps%253A%252F%252Fapp.liv-ex.com%252F%2523%252Fanalysis-tool%252Findices-explorer%252FLX1000&amp;nonce=D_QOwsrHXAaiXMlupcE08A5M~Z64ToeL&amp;auth0Client=eyJuYW1lIjoiYXV0aDAuanMiLCJ2ZXJzaW9uIjoiOS4zLjAifQ%3D%3D">Liv-ex</a>
[3] Source: <a href="https://www.zoopla.co.uk/discover/property-news/best-buy-to-let-locations/" target="_blank" rel="noopener">Zoopla</a>
[4] Source: <a href="https://www.zoopla.co.uk/discover/property-news/best-buy-to-let-locations/" target="_blank" rel="noopener">Zoopla</a>
[5] Source: <a href="https://joseph-mews.com/uk-property-investment/best-rental-yields-uk/#:~:text=What%20is%20the%20UK%20Average,of%20%C2%A31%2C064%20per%20month." target="_blank" rel="noopener">Joseph Mews</a>
[6] Source: <a href="https://login.liv-ex.com/login?state=hKFo2SBFSmhxaFZyb1RmY0tlZzhucjdYSVNQQVo4SWdlWGJtSqFupWxvZ2luo3RpZNkgMmxXSkFXODB5UXpWNXJBdllhTmtlMXVBMVptelUtdDSjY2lk2SAzc2NZcHA4N3VNYlZLSHFrN0FvaHk1NG92ODA0WnBWNg&amp;client=3scYpp87uMbVKHqk7Aohy54ov804ZpV6&amp;protocol=oauth2&amp;response_type=token%20id_token&amp;scope=openid%20email%20profile&amp;audience=https%3A%2F%2Fliv-ex.eu.auth0.com%2Fapi%2Fv2%2F&amp;redirect_uri=https%3A%2F%2Fapp.liv-ex.com%2F%3Ftarget_url%3Dhttps%253A%252F%252Fapp.liv-ex.com%252F%2523%252Fanalysis-tool%252Findices-explorer%252FLX1000&amp;nonce=n9D53JCf1tRrUfVJO0l3Lkbw6Pu13NNp&amp;auth0Client=eyJuYW1lIjoiYXV0aDAuanMiLCJ2ZXJzaW9uIjoiOS4zLjAifQ%3D%3D" target="_blank" rel="noopener">Liv-ex</a>
[7] Source: <a href="https://www.kfh.co.uk/buyers/the-costs-involved-in-buying-a-property/#:~:text=Legal%20fees&amp;text=A%20fully%20qualified%20reputable%20solicitor,additional%20fees%20would%20be%20payable." target="_blank" rel="noopener">KFH</a>
[8] Source: <a href="https://hoa.org.uk/advice/guides-for-homeowners/i-am-selling/cost-selling-home/" target="_blank" rel="noopener">HOA</a>
[9] Source: <a href="https://www.moneysupermarket.com/mortgages/rates-table/buy-to-let/purchase/?propertyValue=160000&amp;mortgageAmount=111000&amp;remainingTerm=22&amp;repaymentMethod=InterestOnly&amp;sortState=MonthlyRepaymentAmount" target="_blank" rel="noopener">Money Supermarket</a>
[10] Source: <a href="https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/housepriceindex/august2022#:~:text=Image%20.csv%20.xls-,The%20average%20UK%20house%20price%20was%20%C2%A3296%2C000%20in%20August,higher%20than%20in%20August%202021." target="_blank" rel="noopener">ONS</a>
[11] Source: <a href="https://login.liv-ex.com/login?state=hKFo2SB6ZG5ZQXBlQndwbXRmY240WVdvZ053ZUw1NlFIbWRDeqFupWxvZ2luo3RpZNkgdlRlaTFubXo5ZzJDU0hMSjFzSkZWaFkwdGNIQ3lWUHCjY2lk2SAzc2NZcHA4N3VNYlZLSHFrN0FvaHk1NG92ODA0WnBWNg&amp;client=3scYpp87uMbVKHqk7Aohy54ov804ZpV6&amp;protocol=oauth2&amp;response_type=token%20id_token&amp;scope=openid%20email%20profile&amp;audience=https%3A%2F%2Fliv-ex.eu.auth0.com%2Fapi%2Fv2%2F&amp;redirect_uri=https%3A%2F%2Fapp.liv-ex.com%2F%3Ftarget_url%3Dhttps%253A%252F%252Fapp.liv-ex.com%252F%2523%252Fanalysis-tool%252Findices-explorer%252FLX1000&amp;nonce=GnDumfi0.o50fYrjk-dyuZqepd0Hu6bf&amp;auth0Client=eyJuYW1lIjoiYXV0aDAuanMiLCJ2ZXJzaW9uIjoiOS4zLjAifQ%3D%3D" target="_blank" rel="noopener">Liv-ex</a>

Could Fine Wine be a Better Investment than Property?

While Chablis declared 2021 to be a ‘complicated’ year, 2022 has proven to be a real contrast, with the Chablis Commission having declared this year’s harvest to be a healthier and overall higher-yielding one.
Paul Espitalié – president of the Chablis Commission – commented that 2022 was a much more dynamic vintage when compared to 2021, as the years before it had ushered in ‘challenges for winemakers in Chablis with the changing and unpredictable climate’.
Many winegrowers in Chablis rejoiced after the harvest this year as yields were plentiful and almost up to the maximum amount permitted. Because of this, the commission is hopeful that the region will be able to make up some lost ground with regards to volumes for export markets, where the UK still holds the top spot.
Espitalié commented that: ‘The UK continues to be our most important export market and we believe a key element to the continuing success of Chablis wines’. He also added that one of the commission&#8217;s main focuses is to increase consumer awareness of both Petit Chablis and Chablis wines.
‘These appellations have just as much to offer the market, particularly in the current financial climate in terms of offering great value wines,’ he said.
The 2022 harvest’s wines will be available in the UK shortly. Over the course of a year, a total of 3.8 million bottles were sold in the UK in 2021 &#8211; 2022.
Looking ahead, 17% of all Chablis vineyards are currently 100% organic and the subregion is also on track to hit the Burgundy-wide target of becoming carbon neutral by 2035. The aim of these initiatives is to improve the vineyards’ health and protect the local industry for the years to come.
Read more about the potential of <a href="https://winecap.com/news/the-2022-burgundy-wines-real-potential" target="_blank" rel="noopener">Burgundy’s 2022 harvest here</a>.

Chablis Commission Pleased with 2022 Harvest

Our Insights from leading Bordeaux fine wine producers report is now available to download. This report is the result of 32 face-to-face interviews WineCap conducted in 2022 with some of Bordeaux’s leading châteaux owners, winemakers and senior representatives. 
While global stock and bond markets have had a turbulent year, the fine wine sector has continued to perform strongly. Thanks to its low correlation with mainstream asset classes and defensive characteristics, fine wine is attracting a wider investor audience.
WineCap recently undertook research among leading fine wine producers responsible for many of the highest quality vineyards in Bordeaux. We are delighted to share some key findings, which include, wine producers’ oldest vintage and favourite year, their views on new permitted grape varieties and how they are coping with challenges such as climate change.
Despite the perception that older vintages are more desirable, it’s fascinating to find that most leading Bordeaux producers prefer wines from the last decade. Find out which vintages they mention in particular in this report. 
While six new grape varieties are now permitted to be planted in Bordeaux, to help producers adapt to climate change, Cabernet Sauvignon remains the dominant grape variety, representing 32% of the total 1,668 hectares in the region. 
A key priority for the wine producers we interviewed is to maintain the same volume to all their existing customers, while attempting to supply as much as possible to new ones. While some producers have acquired adjacent land to expand production volumes to meet growing demand, volumes can vary dramatically depending on the quality of the harvest. Managing demand expectations is therefore a key challenge and calls for a flexible approach on the part of the customer.
Download our new report to discover key insights from one of the world’s top fine wine regions.

Insights from leading Bordeaux fine wine producers

Winemakers in Champagne have written an open letter – published in Le Monde on the 6th of December – that voiced their opposition to the professional bodies’ reneging on a commitment to phaze out the use of all chemical herbicides in the region by 2025.
The date was significant: it was the day of the Annual General Meeting of the Association Viticole Champenoise (AVC). At the AGM, both the Syndicat General des Vignerons (SGV) and the Union des Maisons de Champagne (UMC) had officially announced – five years previously – that herbicides would be banned.
Jean-Marie Barillère, former president of the UMC, commented in 2018: ‘There are only two possible outcomes: either we move forwards or we are forced to move, with all the risks the latter entails in ecological terms, in terms of image and therefore in economic terms for our industry and our businesses. I prefer to forge a path towards a virtuous Champagne, rather than keep dwelling on the past.’
Maxime Toubart, president of the Syndicat General des Vignerons, also said at the 2018 AGM: ‘Our objective is, in a few years&#8217; time, to be able to talk about a 100% sustainable Champagne, that takes its commitments seriously and can be held up as an example, and which can proudly proclaim: zero herbicides.’
Despite previous assurances, in 2022, Toubart refused to add the zero-herbicide policy to the cahier des charges: the Champagne appellation’s rulebook. Because of this, the dispute between the SGV, the Association Biologique Champenoise (ACB) and a union of organic growers, has only gained momentum.
President of the ACB, Jérôme Bourgeois, commented: ‘It is unacceptable that a prestigious appellation like Champagne can even imagine walking back a core environmental promise made five years ago, especially in today’s ecological climate.’
While the main Champagne body (the CIVC) didn’t comment on the open letter at the 2022 Annual General Meeting, David Châtillon – UMC president – did speak about the importance of preserving ‘Champagne&#8217;s perceived image’. Promisingly, he also made it clear that the Champagne region is committed to its zero-herbicide pledge, although no deadline was given.
In their address, Toubert added that ‘Champagne was greener than it ever had been before.’ This was supported by Arnaud Descotes, the CIVC&#8217;s technical director, who highlighted that the new herbicide law brought in last year has restricted the number of treatments permitted, as well as which herbicides are allowed.
Whether the initial deadline to rule out herbicides by 2025 will be met remains to be seen. However, one thing is for sure, those who signed the open letter are still keeping up the pressure: ‘We, Champagne winegrowers, Champagne houses and members of cooperatives, call upon the SGV and the UMC to continue implementing their progress strategy by respecting the deadline of &#8216;Zero Herbicides by 2025&#8217;, embracing an effective and sustainable commitment of our sector, in the interests of all stakeholders in the Champagne region and our fellow citizens.’
Read more recent Champagne news: <a href="https://winecap.com/news/moet-hennessys-champagne-stocks-running-low" target="_blank" rel="noopener">Moët Hennessy’s Champagne Stocks Running Low</a>.

Champagne Producers Fight Against Zero Herbicide U-Turn

Christie’s recent Finest and Rarest Wines &amp; Spirits sale that took place in London on the 1st and 2nd of December reached over £2.12 million at auction. Lots included anniversary collections from Champagne Philipponnat and California’s Ridge Vineyards, as well as six bottles of Pétrus 2000.
The top lot was made up of six bottles of Pétrus 2000 and fetched an impressive £30,000, which was the same value as 12 bottles of Le Pin 2018. Representing Burgundy, six magnums of Georges Roumier, Bonnes Mares 2005 went for £25,000.
Other notable wine highlights in the sale included some very special lots unearthed from King’s College Cambridge’s cellars: six bottles of Château Lafite-Rothschild 1959 that raised £20,000, 12 bottles of Taylor 1948 Port that went for £11,875 and six bottles of Croft 1945 that sold for £6,875.
The London sale celebrated Ridge Vineyards’ 60th anniversary. The collection comprised wines from each of its six decades and raised a total of £117,075. Mixed lots consisted of bottles, magnums and large formats of the leading Napa producer’s most exclusive wines, offered straight from its cellars. The star expression was undoubtedly nine magnums of Ridge Monte Bello that sold for £7,500.
Another key milestone the sale paid honour to was the 500th year anniversary since April de Philipponnat arrived in Champagne in 1522. The Champagne house presented 11 lots direct from its cellars and all of them sold, raising a total of £13,763. Particular highlights included three magnums of Clos des Goisses L.V. 1996.
A spokesperson from Christie’s commented that buyers from 22 countries, across five continents took part in the auction. Interestingly, millennial collectors were well represented, with 46% of new registrants being part of this demographic.
Read more about the recent <a href="https://winecap.com/news/hospices-de-beaune-2022" target="_blank" rel="noopener">Hospices de Beaune Burgundy auction here</a>.

Christie’s London Auction Reaches Over £2.12 million

Château Mouton Rothschild has unveiled its 2020 label by Scottish artist Peter Doig. The renowned figurative painter settled in Trinidad in 2002 and divides his time between there and Scotland. Doig is the first British artist to have been commissioned to paint this leading Bordeaux château’s label since Lucien Freud in 2006. Other famous British contributors include (formerly) Prince Charles in 2004 and Francis Bacon in 1990. 
The initiative to invite an artist to adorn the Château Mouton Rothschild bottle label with a painting first began in 1924 with the poster artist Jean Carlu. 
The 2020 label is of a dreamlike scene showing red grapes growing under the light of a full moon with workers in the vineyard. Doig has drawn parallels with other renowned artists such as van Gogh, Bacon and Cézanne who have all painted farm or vineyard workers. The main figure in the centre of the piece – Emheyo Bhabba – is one of Doig’s close connections and muses. A Trinidadian cuatro player, Emheyo has previously performed in one of the artist’s previous exhibitions in Paris using this four string guitar.
‘The painting shows something of what goes on behind the scenes in the production of wine, what happens offstage, as it were’, commented Doig. ‘It’s a sort of ode to workers, to all those involved at the various stages of making a wine before it’s finally bottled. It’s a dream with a romantic streak, as if someone spontaneously decided to sing in the vines. It’s a moment of poetry, where you can take your time. It’s neither really day nor really night, but rather something in between, between waking and sleeping. It is possible to see it as a progression, a dream journey in the world of the harvest.’
Commenting on this new label, Julien Beaumarchais de Rothschild said: ‘We wanted an artist who uses canvas and pictorial material to express figurative subjects.’ ‘Unrivalled as a colourist, Peter Doig focuses entirely on painting and has become one of his generation’s foremost exponents of the discipline, holding exhibitions all over the world. There is something very special about his technique and his universe that sets them apart in contemporary figurative art. His subjects are very varied, his painting resists any classification: he has succeeded in creating his own, inimitable world.’
Take a closer look at the <a href="https://www.chateau-mouton-rothschild.com/label-art/discover-the-artwork" target="_blank" rel="noopener">2020 label and at previous years’ here</a>.

2020 Château Mouton Rothschild Label Unveiled

Moët Hennessy’s CEO has commented that due to high demand from affluent buyers in the run up to Christmas, its Champagnes are ‘running out of stock’.
Philippe Schaus, Moët Hennessy’s CEO, spoke to Bloomberg Television and said that the French luxury company – that owns top Champagne brands including, Dom Pérignon, Krug, Moët &amp; Chandon and Veuve Clicquot – was ‘running out of stock’ of some of its bubbly. This is mainly due to Covid rules having been relaxed and more people socialising.
‘As people are coming out of Covid there’s been pent up demand for luxury, enjoyment and travelling,’ Schaus commented.
Schaus didn’t elaborate on which Champagnes were running low, or hint at what the state-of-play is with specific brands&#8217; stock levels.
Louis Vuitton Moët Hennessy (LVMH) shared last month that its wine and spirit divisions had delivered double-digit revenue growth in Q3 of this year. Still wines and Champagne were the best performing categories. 
The luxury conglomerate announced that sales had risen ‘sharply’ this year in Europe, the United States and Japan. The two main drivers of this growth can be attributed to international travel resuming after the pandemic, as well as ‘solid demand’ from consumers.
On the subject of the strength of the US dollar in the market, Bloomberg made the point that strong growth might simply have been because US shoppers were able to take advantage of this by buying luxury items in Europe. However, Schaus indicated that there is still uncertainty out there due to rising inflation. It’s possible that some products will go up in price due to the rising cost of raw materials. 
Find out more about Dom Pérignon’s new P2 2004 release in <a href="https://winecap.com/news/dom-perignon-2004-plenitude-2" target="_blank" rel="noopener">our recent news article</a>.

Moët Hennessy’s Champagne Stocks Running Low

Each year since 1859, the Hospices de Beaune has taken place on the third weekend in November. It’s the world’s most famous charity wine auction that happens in the heart of Burgundy’s Côte d’Or: the town of Beaune. Christie’s auction house had organised the annual event since 2005 and it is undeniably the key occasion in any Burgundy lover’s calendar. However, it bounced back last year with a physical auction (2020 was virtual due to Coronavirus) and with a new auction house at the helm too: Sotheby&#8217;s.
<h2>The History of the Hospices de Beaune </h2>
The Hôtel Dieu (God’s House) was built in 1443 by the Chancellor of the Duchy of Burgundy Nicolas Rolin and was originally a charitable hospital. It was founded to house sick Burgundians and help them recover there. The auction was first created in order to raise funds to support the Hospices’ benevolent works. Today, it is no longer a hospital, nor are any wines made there as a new winery was constructed in 1994. However, the funds raised from the auction continue to support those who work in the vineyards. Even those who may not be familiar with the auction might just recognise the eye-catching roof tiles of the Hôtel Dieu that shimmer in the Côte d’Or sunlight.
<h2>The 2022 Wine Auction</h2>
This year’s 162nd edition of this prestigious wine auction will take place on Sunday the 20th of November. Sotheby’s has announced that it is set to be one of the largest auctions in its history, with a total of 802 barrels from the 2022 vintage that hail from all of the 51 cuvées.
The auction will be made up of 620 barrels of red wines and 182 barrels of white wines from 60-hectares of holdings belonging to the Hospices which are in their second year of organic conversion. Two new cuvées that are included are the Corton Grand Cru, Cuvée Les Renardes and Beaune Premier Cru, Clos des Mouches, Cuvée Hugues et Louis Bétault.
Each year the auction features a special charity barrel – the Pièce des Présidents – (the Presidents’ barrel). This year, the selected charity barrel is a Corton Grand Cru, in honour of Louis Fabrice Latour, former head of Burgundy négociant Maison Louis Latour, who passed away in September. 
The proceeds from this charity lot will help support the Princesse Margot Association that helps children with cancer and the World Vision Organisation that comes to the aid of vulnerable children.
The 2021 auction, which was run by Sotheby’s for the first time, raised  €12.6 million in total, with a record €800,000 solely for the Presidents’ barrel.
Read more about <a href="https://winecap.com/news/the-2022-burgundy-wines-real-potential" target="_blank" rel="noopener">this year’s Burgundy vintage here</a>.

Exterior of the Hotel Dieu in Beaune with the sun falling on the roof's tiles

Hospices de Beaune 2022 Wine Auction

Dom Pérignon is launching its new 2004 Vintage Plénitude 2 (P2) Champagne this month in Hong Kong where the prestigious Champagne house has also announced its brand new member of the Hong Kong Dom Pérignon Society.
The Plénitude 2 wines represent the Champagne being ‘elevated to its second life’. With ‘close to 15 years of slow transformation in the cellars’, the wines take on a new ‘vitality’ with this extra maturation.
This launch focuses on the 2004 vintage, a year which the maison commented on as being ‘a year of renaissance and calm’. While August was cooler than normal, the weeks that superseded it brought a dry heat that allowed the vines to grow the ripest and fullest fruit.
The house has now released its tasting notes for the new 2004 expression which has some 18 years of age. On the nose, expect ‘citrusy notes of pink grapefruit and blood orange, which gently cede to figs’. There’s also plenty of brioche and roasted nuts on the palate with this new release ending with an elegant finish.
William Kelley at <a href="https://www.robertparker.com/wines/KQCkAmJg8nEjMiufD/moet-chandon-dom-perignon-p2-2004#professional-notes" target="_blank" rel="noopener">Wine Advocate</a> awarded this new 2004 vintage 95 points and proclaimed that it is ‘drinking beautifully on release’.
The Dom Pérignon Society is a global network of top chefs and proponents whose main focus is on Plénitude 2. The newest member of this elite group, which comprises 64 global chefs and restaurants, is Chef Julien Tongourian who works at Hong Kong’s L’Atelier de Joël Robuchon.
Tongourian will now join his two fellow Hong Kong counterparts: Chef Maxime Gilbert of two Michelin-starred Écriture and Chef Richard Ekkebus at Amber at Landmark Mandarin Oriental which also has two Michelin stars.
To launch the 2004 Dom Pérignon P2, each of the three Dom Pérignon Society Members in Hong Kong have created a special menu to accompany this new Champagne release. Each menu will represent an interpretation of a key moment in each of the Chefs’ careers. The menus are available now at the above three Hong Kong restaurants for a limited time.
Read more news from the Champagne world in this recent article about <a href="https://winecap.com/news/pinault-familys-new-merger" target="_blank" rel="noopener">Champagne Henriot&#8217;s merger</a>.

Dom Pérignon Reveals the 2004 Plénitude 2

The greatest risk for many investors today is – undoubtedly – the climate crisis. Each year the planet warms by 0.018 degrees Celsius[1]. And the past six have been among the hottest since records began. The resulting floods, fires and changing biodiversity are impacting nearly all asset classes and investment types. By 2050, climate change is anticipated to restrict global GDP by 14%[2].
For investors in fine wine, the rising heat could signify the end of an era for some of the greatest flavours, adding further scarcity to valuable bottles. On the other hand, the changing temperatures could offer interesting opportunities elsewhere.
In this article, we’ll uncover the major threats and opportunities for fine wine investors.
<h2>Scarcity will make much-loved bottles more valuable</h2>
Vineyards across Southern Europe and wine regions of North America are facing an uphill battle trying to mitigate the effects of climate change. In August 2022, an unprecedented hailstorm tore through Châteauneuf-du-Pape vineyards in France. The 120 mile-per-hour wind destroyed up to 90% of the vines in some of the most celebrated plots. So extreme was the storm that one vineyard owner described the scene as &#8216;completely shredded&#8217; and &#8216;not a leaf is left'[3].
On the other end of the spectrum, extreme heat waves combined with drought in the summer provoke catastrophic forest fires. While only a small number of vineyards are caught up in the blaze, the resulting smoke can disrupt the delicate flavours and quality of the wine. Smoke taint – the ashy taste that lingers – can render entire harvests useless, leaving assets stranded. Even prized and <a href="https://winecap.com/news/heatwave-provokes-bordeaux-fires" target="_blank" rel="noopener">world-famous regions like Bordeaux</a> are feeling the painful financial impact.
It seems inevitable that many of the most-loved wines will become less and less available in the future. What this means for investors is that already-rare bottles are likely to become even more scarce and sought-after. Fine wine is already a limited and depleting asset, which climate change exacerbates. What’s more, as hungry new collectors enter the market, demand could even further outstrip supply, further raising the value of fine wine.
What’s more, according to 2021 data from Knight Frank, the average fine wine investment has returned a staggering 127% over ten years. Sticking to the strategy almost always pays off.
<h2>New flavours may be hard for investors to stomach</h2>
Even for regions without droughts or forest fires, climate change can seriously impact the flavour of wine. This is because the lack of water irrigation, combined with heat waves creates more sweetness and less acidity in the grapes. To avoid the wine becoming too sweet, producers may need to <a href="https://winecap.com/news/bordeauxs-earliest-ever-harvest" target="_blank" rel="noopener">harvest early</a>, which risks missing out on characteristic and valuable secondary flavours.
Not only could iconic wines now start to lack their defining volume, but the added sweetness could mean different varieties taste more alike. For wine lovers, who may enjoy certain brands or pride themselves on detecting notes, this development could be hard to stomach. There is a serious investment risk that future bottles could lose value, compared to their ancestors.
To avoid this cultural and financial damage, some regions are now lifting regulations to allow irrigation. In August 2022, for example, the Institut National de l’Origine et de la Qualité gave <a href="https://winecap.com/news/3-bordeaux-appellations-can-irrigate" target="_blank" rel="noopener">special dispensation for three sites in Bordeaux</a> to water their vines. What this means for investors is still unclear. Depending on the success of regulations and irrigation systems, future harvests may yet retain their distinctive taste and value.
Another intriguing development triggered by climate change is the renewed focus on hybrid grapes. As famed vineyards look to adapt and mitigate against extreme weather, producers are working side-by-side with scientists to create more resilient grapes. While many critics remain sceptical, hybrid grapes could help vineyards restore some of their former glory..
<h2>Exciting investment opportunities are entering the scene</h2>
There are not many silver linings to the catastrophic climate situation. However, for investors in fine wine, there is a unique and exciting opportunity to buy new varieties early. As the planet warms, new terrains are opening, in previously unthinkable places.
Incredibly, vineyards are popping up in the UK, Belgium, Norway, and Sweden. In the UK, the wine real estate market is enjoying unprecedented growth, with land selling for £25,000 per acre[4]. English land dedicated to winemaking has more than doubled in the past eight years and looks set to continue[5]. As increasing numbers of producers and investors snatch up these pockets of land, it seems likely that the British wine scene is about to mature. Sparkling wines in particular, such as those produced in Sussex are exploding in popularity, with some critics describing the taste as comparable to Champagne. As of July 2022, sales of English and Welsh wine have surged by 69% from 2019[6]. Whether this boost will translate over to the fine wine market has yet to be seen, but with the warmer climate, British bottles could prove to be an interesting investment opportunity.
<h2>Vineyards with a sustainable focus look promising</h2>
Of course, the impacts of the climate crisis go far beyond the physical weather changes. Consumers are increasingly looking at the sustainability of their products too and thinking about how their money affects the planet. According to 2022 research, 48% of US alcohol drinkers say that they’re more likely to buy bottles if they see the company has sustainable or environmental initiatives[7].
In many ways, <a href="https://winecap.com/learn/5-ways-fine-wine-investments-good-for-environment" target="_blank" rel="noopener">fine wine investments are already good for the environment</a>, which is good news for the market. And it seems that those vineyards with extra sustainable initiatives in place could be even better positioned to capitalise on this trend.
&nbsp;
[1] Source: <a href="https://www.visualcapitalist.com/global-temperature-graph-1851-2020/" target="_blank" rel="noopener">Visual Capitalist</a>
[2] Source: <a href="https://www.swissre.com/risk-knowledge/mitigating-climate-risk/net-zero.html" target="_blank" rel="noopener">SwissRe</a>
[3] Source: <a href="https://www.winespectator.com/articles/tornado-and-hail-devastate-famed-chateauneuf-du-pape-vineyard" target="_blank" rel="noopener">Wine Spectator</a>
[4] Source: <a href="https://spearswms.com/private-equity-investment-growing/" target="_blank" rel="noopener">Spears Wealth Management</a>
[5] Source: <a href="https://winegb.co.uk/2022/06/17/uk-wine-industry-sees-a-boom-in-sales-as-wine-drinkers-get-a-thirst-for-english-wines/" target="_blank" rel="noopener">Wine GB</a>
[6] Source: <a href="https://winegb.co.uk/2022/06/17/uk-wine-industry-sees-a-boom-in-sales-as-wine-drinkers-get-a-thirst-for-english-wines/" target="_blank" rel="noopener">Wine GB</a>
[7] Source: <a href="https://www.theiwsr.com/key-trends-driving-the-global-beverage-alcohol-industry-in-2022/" target="_blank" rel="noopener">IWSR</a>

Fire in forest outside Bordeaux as viewed from the water

How Climate Change Affects the Value of Fine Wine

The US buyer whose recent purchase of Château Lascombes – that topped the list as the most expensive acquisition in the Médoc ever – has been revealed as Lawrence Family Wine Estates.
This is the US investor’s first acquisition in Bordeaux and, indeed, its first ever purchase in Europe. The family’s existing portfolio of brands include sought-after Napa names such as Heitz Cellars, Burgess and Stony Hill Vineyard.
While the full details of the sale haven’t been disclosed, it is a strategic and important one. Château Lascombes is a leading Second Growth located in the Margaux appellation. This top estate rubs shoulders with the four other leading Margaux châteaux including, Châteaux Rauzan-Ségla, Rauzan-Gassies, Brane Cantenac and Durfort-Vivens. What sets Lascombes apart is its size: the estate is the largest in the appellation and spans just over 110 hectares with an additional 10 hectares in neighbouring Haut-Médoc.
The French press reported the acquisition as the largest sole financial transaction in the Médoc’s history. However, what is interesting from the Lawrence Family Wine Estates’ press release is that, and there is little detail, a minority stake in Château Lascombes is to continue to be held by its previous owners, Mutuelle d’Assurance du Corps de Santé Français (MACSF)
Since its foundation in the 17th Century, the estate has changed hands a number of times. Most recently, in 2001, the USA&#8217;s Colony Capital bought it for $67 million and then sold it in 2011 to MACSF for an estimated €200 million.
Commenting on its recent acquisition, Gaylon Lawrence, owner of Lawrence Family Wine Estates’, said: ‘We are honoured to become the new stewards of such a historical estate. This Château has some of the greatest vineyards in Margaux and our family looks forward to caring for Château Lascombes for many generations to come’.
Currently, Lascombes represents great value when compared to other Second Growths. Its average price on <a href="https://winecap.com/wine-track" target="_blank" rel="noopener">Wine Track</a> is £689, compared to Château Cos d&#8217;Estournel at £1,580, Château Montrose at £1,300 and Château Léoville las Cases at £1,980. Could this new purchase and the recent investment in new winemaking facilities be the beginning of a change in its price point, just like the ones we&#8217;ve seen in recent years at Châteaux Figeac and Canon?
Discover the other high profile acquisitions in the world of fine wine <a href="https://winecap.com/news/increased-global-demand-for-fine-wines" target="_blank" rel="noopener">in our recent article</a>.

Exterior of Chateau Lascombes from the vineyard

US Buyer Acquires Bordeaux’s Château Lascombes

One of Burgundy’s most sought-out producers is Domaine de la Romanée-Conti (DRC). It was the Benedictine monks who were the first to recognise the Côte d’Or’s potential as a winegrowing area. They divided up and organised the parcels of land that produced the finest grapes. 
This piece of land was originally called ‘Le Cloux des Cinq Journaux’, then ‘Le Cros de Cloux’. After changing ownership many times after the monks tended the vines there, the plot was renamed as ‘La Romanée’ by the Croonembourg family. However, it wasn’t until 1760 that this legendary site was given its name that remains to this day. Louis-François of Bourbon – the Prince Le Conti – named it ‘Romanée-Conti’ when he purchased the 4.46 acre plot.
It is rumoured that the prince acquired the land as he discovered that his rival – Madame de Pompadour – who was also vying for the affection of the king, Louis XV, planned on buying the vineyard. The prince hired an agent to carry out his wishes and hoarded all the domaine’s wines for himself, throwing elaborate parties for his distinguished guests.
Domaine de la Romanée-Conti’s wines are some of the most eye-wateringly expensive in the world. Even having the means to purchase them doesn’t necessarily translate into being able to buy them as production levels are so low that only approximately 500 cases of La Romanée-Conti are made each year.
One villain – having discovered just how much the wines were retailing for – hatched a plan in 2010 to hold DRC’s co-owner and head winemaker, Aubert de Villaine, to ransom.
Having made detailed drawings of the vineyard and, shockingly, having poisoned two of DRC’s vines with herbicide already, the crook sent a ransom letter, addressed to Villaine. In it, they demanded €1.3 million from the estate, otherwise they would poison the remainder of the historic vines. 
It transpired that the culprit wasn’t as cunning as you’d have thought. Villaine enlisted the help of private investigators who delivered the ransom money to the specified location and a certain Jacques Soltys retrieved a parcel full of false notes and was met by police who were lying in wait.
After such an ordeal, things returned to normal at the estate. The grapes were picked, fermented and transformed into the 2010 vintage that, unsurprisingly, was proclaimed to be one of the all-time greatest years. 
Search for all of DRC’s wines and find out their performance on <a href="https://winecap.com/wine-track" target="_blank" rel="noopener">Wine Track</a>.

The DRC Ransom Plot

As a perfect storm of pandemics, war, inflation, climate change and unsteady politics collide, many investors are feeling the impact in their portfolios. With currencies, bonds and even equities zig-zagging downwards, it can be a stressful time.
For investors in fine wine, however, the tumultuous environment provides an opportunity not just to preserve wealth but to enhance it. In this article, we’ll uncover three essential rules to help maximise returns and avoid pitfalls.
<h2>1. Avoid emotional investing with a steadfast strategy</h2>
While most wine investors are deeply passionate about the industry, for the best returns it’s important to avoid emotions when trading.
When an asset is plunging, many investors fear that it will lose even more value unless they sell quickly. This reaction can lead to terrible investment decisions, like selling at the lowest possible prices. Likewise, when other assets are growing, many investors want to jump on the bandwagon to boost their returns. This fear and euphoria style is known as “emotional investing” and it costs investors around 3% of their returns each year[1]. During high-stress periods, like recessions or market downturns, emotional investing losses can increase to 6% or 7%[2]. Market noise and herd behaviour can ramp-up the emotional pressure exponentially.
To avoid suffering from needless losses, investors should try to stay cool when a market storm is brewing. In the words of world-leading investor, Warren Buffet, “To be a successful investor you must divorce yourself from the fears and greed of the people around you, although it is almost impossible.” Experts agree that the best way to do this is to create a risk-adjusted strategy, diversify and – no matter how you may be feeling that day &#8211; don’t deviate from the plan.
It can also help to remember that investments in fine wine have proved to be resilient against market shocks over the long-term. The Liv-ex Wine 1000, for example, has grown in value by 50.8% over the past five years. And since its inception in 2004, prices are up nearly five-fold.
<img loading="lazy" class="aligncenter wp-image-1075 " src="https://wp.winecap.com/wp-content/uploads/2022/10/LivEx-1000-since-2004-375x248.png" alt="Graph showing the Liv-Ex 1000 growing since 2004" width="572" height="378" srcset="https://wp.winecap.com/wp-content/uploads/2022/10/LivEx-1000-since-2004-375x248.png 375w, https://wp.winecap.com/wp-content/uploads/2022/10/LivEx-1000-since-2004-768x508.png 768w, https://wp.winecap.com/wp-content/uploads/2022/10/LivEx-1000-since-2004-1536x1017.png 1536w, https://wp.winecap.com/wp-content/uploads/2022/10/LivEx-1000-since-2004-2048x1355.png 2048w, https://wp.winecap.com/wp-content/uploads/2022/10/LivEx-1000-since-2004-1200x794.png 1200w, https://wp.winecap.com/wp-content/uploads/2022/10/LivEx-1000-since-2004-1980x1310.png 1980w" sizes="(max-width: 572px) 100vw, 572px" />
Source: <a href="https://app.liv-ex.com/#/analysis-tool/indices-explorer/LX1000" target="_blank" rel="noopener">Liv-ex</a>
What’s more, according to 2021 data from Knight Frank, the average fine wine investment has returned a staggering 127% over ten years. Sticking to the strategy almost always pays off.
<h2>2. Remember fine wine can be a useful shield in recessions</h2>
It can be easy to get caught up in the mayhem of the outside markets, especially when there is so much noise and uncertainty. But investors should remember that fine wine is an alternative asset – and so it’s unlikely to be impacted.
Alternative assets are investments which derive their returns away from the public stock markets. Many will even increase in value during recessions. For example, while stock markets tumbled during the pandemic, fine wine enjoyed significant growth. Over the past two years, the Liv-ex Fine Wine 1000 has performed exceptionally well, delivering returns of 34.9%[3].
Other alternative assets include crypto assets, private equity, private debt, derivatives, collectables and precious metals like gold. Examples of less mainstream assets include <a href="https://winecap.com/learn/7-under-used-alternative-investments" target="_blank" rel="noopener">litigation finance, art, domain names, whiskey, comic books, music royalties and of course, fine wine</a>. These investments can help shield investors’ wealth from market shocks.
At the high-end, fine wine derives its value from two key streams: intrinsic factors and a self-contained marketplace.
Intrinsic factors include things like the quality of the vineyard, year of production, storage, or label. While the self-contained market is made up of a niche group of collectors and investors. These are often extremely wealthy and passionate people, who are probably less affected by inflation or interest hike scares. It’s also a global market, rising above any one region.
One of the superpowers of fine wine is that it’s a <a href="https://winecap.com/learn/how-does-fine-wine-react-in-a-recession" target="_blank" rel="noopener">famously recession-resistant asset</a>. During market downturns, it can be helpful to have a few premium bottles in a wealth portfolio.
<h2>3. Take advantage of fine wine’s inflation-shielding properties</h2>
Across the world – and especially in the UK – inflation is reaching record highs. In September 2022, the Consumer Price Index (a measurement of the change in prices) hit a whopping 8.8%[4]. What this means for investors is that debt, cash, and cash-like assets will erode in value faster than normal. But that’s not all.
To slow the economy and prevent lenders from abandoning their investments, central banks usually raise interest rates too. This can have a ripple effect across the markets, sometimes causing businesses to buckle and mortgages to falter. Many of the traditional “60% equity, 40% bonds” investment portfolios may suffer from losses during these turbulent times. Fine wine, however, is different.
This is because the value of fine wine &#8211; unlike debt, equity, and even property – is not directly impacted by inflation. As a sought-after and tangible asset, fine wine retains its worth. This makes it an excellent diversifier for investors, who are looking to <a href="https://winecap.com/learn/is-fine-wine-inflation-proof" target="_blank" rel="noopener">shield their wealth from inflation</a>.
<h3>The fine wine market is over-brimming with potential</h3>
The fine wine market is an exciting and vibrant space. Filled with passionate investors and recession-resistant bottles, it’s over-brimming with opportunities.
If you’re interested in finding out more about how you can diversify your wealth and shield against inflation, we’d love to hear from you. We offer <a href="https://winecap.com/start-investing" target="_blank" rel="noopener">complimentary 30-minute consultations</a> where you can ask questions and discover more.
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[1] Source: <a href="https://www.ft.com/content/ad548fde-7ee2-42e4-89d7-97cbef068c56" target="_blank" rel="noopener">Oxford Risk and Financial Times</a>
[2] Source: <a href="https://www.ft.com/content/ad548fde-7ee2-42e4-89d7-97cbef068c56" target="_blank" rel="noopener">Oxford Risk and Financial Times</a>
[3] Source: <a href="https://app.liv-ex.com/#/analysis-tool/indices-explorer/LX1000" target="_blank" rel="noopener">Liv-ex</a>
[4] Source: <a href="https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/consumerpriceinflation/september2022" target="_blank" rel="noopener">UK ONS</a>

3 Rules for Fine Wine Investors During Market Turbulence

Global wine sales are on the up as large retail outlets in Asia and the USA have begun purchasing a wider array of sought-after fine wines and distributing and selling them throughout their sites.
In Asia, South Korea’s Lotte Department Store has, according to local news outlets, started hiring world-class sommeliers who are buying fine wines from traditional wine regions. What’s more, its sommeliers are curating these selections to offer a point of difference to the wines usually available to buy on the domestic market. With mid-priced wines having had to make way for more premium ones, the department store chain announced that its wine sales grew over 20% in September. 
Shinsegae Property, the property arm of the Korean-based luxury company, <a href="https://winecap.com/news/shafer-vineyards-buys-stags-leap-district-vineyard" target="_blank" rel="noopener">purchased Napa’s Shafer Vineyards</a> in February earlier this year, as well as  the nine-hectare Wildfoote Vineyard in the Stags Leap District of Napa Valley in August. Shinsegae’s aim is to supply fine wines from boutique producers to its Shinsegae Department Store.
Similarly, the Hyundai Department Store has created Vino H, with the objective of sourcing, importing and distributing premium organic wines from around the globe especially for the South Korean market. 
According to a new report created by Rabobank, it predicts that super premium wines in the USA should weather a recession. Stephen Rannekleiv – Rabobank’s global strategist for beverages – commented that while his ‘expectation is that demand for super premium brands will soften notably in Q4 and turn noticeably negative in 2023 … we believe that the long-term growth trend of super premium brands remains intact.’
Rannekleiv also highlighted that, in the USA, merger and acquisitions have been rapidly taking place and, for the most part, this is in the premium tier. Some of the recent acquisitions include <a href="https://winecap.com/news/lvmh-buys-top-californian-winery-joseph-phelps" target="_blank" rel="noopener">LVMH buying Joseph Phelps Vineyards</a> and Treasury Wine Estates&#8217; purchase of Frank Family Wines. 
With the global appetite for fine wines accelerating, more and more corporations are on the lookout to purchase these highly sought-after wineries and vineyards. In the USA, it’s rumoured that the amount paid to acquire estates’ recently has been incredibly high.
Want to learn more about the growing US market? Read our <a href="https://winecap.com/learn/united-states-report" target="_blank" rel="noopener">United States Report</a> to find out the top regions, producers and wines to look out for.

Increased Global Demand for Fine Wines

It’s impossible to know how exactly any asset – including fine wine – will react in a recession. Commonly defined as two consecutive quarters of shrinking Gross Domestic Product output, recessions can have many different causes and implications for the investment markets.
Fine wine, however, has a fascinating trend when it comes to economic downturns. Its characteristics make it a uniquely recession-resistant investment.
In this article, we’ll uncover some examples, and explore how the characteristics of fine wine make it <a href="https://winecap.com/news/fine-wine-investing-during-market-volatiliy" target="_blank" rel="noopener">such a useful asset during turbulent times</a>.
<h2>A track record of performing well in recessions</h2>
Throughout history, as stock markets plummet, fine wine has tended to preserve or even grow in value.
For example, during the COVID-19 pandemic, the Liv-ex Fine Wine 100 index grew in value every month from June 2020 until June 2022. As stock markets around the world tumbled and economies cascaded into recession, the value of fine wine grew over 36%[1].
We saw a similar turn of events with the 2008-09 Financial Crisis. Between August 2008 and February 2009, prices in the S&amp;P 500 index nose-dived by 52%[2]<a href="#_ftn1" name="_ftnref1"></a> &#8211; the largest drop since World War II[3]. By contrast, after a brief dip, the fine wine market began rallying in November 2008. The positive performance of the Liv-ex market lasted until May 2011 and returns ballooned by 70%[4].
Throughout history, analysts have noticed this fascinating correlation. Fine wine and drinkable assets in general seem to be recession-resistant. Sometimes, they even flourish in these environments. So, what makes this delicious investment so robust? Experts have identified five key properties which could help to explain this fascinating success.
<h3>Characteristic 1: Tangible asset</h3>
Tangible assets – like fine wine – tend to do well in recessions, as investors look for reassurance in “real” valuables they can hold. They can also provide an <a href="https://winecap.com/learn/is-fine-wine-inflation-proof" target="_blank" rel="noopener">excellent hedge against inflation over time</a>.
Precious metals like gold, for example, tend to shine out for investors when the outside markets look gloomy. Recently, we saw this during the turbulent 2020-2022 coronavirus pandemic. On the 1st of January 2020, a kilogram of gold cost investors £36,807. By the 9th of September 2020, it had rocketed to £48,151, a 31% increase[5].
Another tangible asset is property. While there have been government stimuli such as Stamp Duty cuts at play, we can still infer that people tend to veer toward physical property or “real” estate during a recession. For example, the average cost of a UK home was £247,000 in January 2020[6], by July 2022, this rose to £292,000[7].
Because fine wine is a physical asset it can be extremely reassuring for investors. What’s more, as it is a scarce asset, with each vintage diminishing over time, it usually grows in value.
<h3>Characteristic 2: Scarcity</h3>
Owning something rare has always been appealing to investors. And when the object is depleting a little more every day, it can become even more precious. Fine wine certainly falls into this category, as a limited number of bottles are produced each year and then slowly consumed.
What’s more, investors in fine wine tend to be passionate. They care deeply about what they’re buying, so unlike many antiques or other collectables, the value isn’t just theoretical. Fine wine investors are often willing to pay a premium for sought-after vintages. If the bottle is rare enough, it can even venture into hundreds of thousands of pounds at auction.
Scarcity – when demand far outstrips supply – is one of the major characteristics of fine wine. And it could be part of the reason why the asset tends to shrug off recessions. Regardless of the stock market outside, when a bottle is deeply sought-after it remains valuable. <a href="https://winecap.com/learn/how-climate-change-affects-value-of-fine-wine" target="_blank" rel="noopener">As vineyards are increasingly grappling with the logistics of climate change</a> these bottles may become yet more scarce.
<h3>Characteristic 3: Edible asset</h3>
Edible assets such as food staples and alcohol tend to remain strong, especially in recessions. Even when consumers tighten their purse strings and steer away from luxury spending, they will still need to buy food from their local supermarket. And, when it comes to alcohol, this holds true as well. Recessions don’t stop people from drinking alcohol. Some studies even suggest that consumers ditch beer in favour of hard liquor in these tough times[8].
Fine wine is no exception. During the COVID-19 lockdown, many people were forced to create their own vacation and special occasion experiences at home, leading to a boost in fine wine sales. According to one survey cited by The Drinks Business, 73% of participants reported spending more on fine wine than at the start of the lockdown[9].
We can also see this trend in the dramatic rise of champagne sales over the COVID-19 period. Trade volumes for Magnums have particularly popped, increasing by a staggering 130% from March 2020 to June 2022[10]. This suggests that the resilience of fine wine market matches the resilience of its drinkers, people will always find a reason to celebrate … or drown their sorrows.
<a href="#_ftnref1" name="_ftn1"></a>
<h3>Characteristic 4: A self-contained market</h3>
The fine wine market is global, yet niche. In particular, the high-end rises above local and regional indices. And this could be another important factor behind its recession resistance. For example, if the FTSE-100 or S&amp;P 500 takes a tumble, the<a href="https://winecap.com/news/why-fine-wine-might-be-a-better-investment-than-you-thought" target="_blank" rel="noopener"> high-end of the fine wine market shouldn’t be impacted because it is self-contained.</a>
In an environment where so many assets and asset classes are connected to each other, this is a valuable characteristic. As the recession today thunders towards us, investors are expressing concern that traditional alternative investors are starting to behave more like mainstream assets. Cryptocurrency took a devastating blow earlier in the year, showing that in many ways it’s more sensitive and volatile than the public stock markets. And some economists are speculating that gold is also losing its sparkle as it slowly starts to mirror the wider markets.
Finding an asset with an independent self-fulfilling market is a rarity for investors and can offer exceptional diversification. <a href="https://winecap.com/learn/7-under-used-alternative-investments" target="_blank" rel="noopener">Genuinely alternative asset classes</a> are becoming harder to find.
<h3>Characteristic 5: Favourable tax</h3>
Another way that fine wine investors stay afloat during recessions is by keeping more of their returns. In the UK, for example, the drinkable asset should be exempt from Capital Gains Tax (CGT). This means that basic rate taxpayers could keep 10% more of their returns, and for higher rate payers that figure rises to 20% (after the annual exemption limit of £12,300 according to 2021/22 tax rules).
<a href="#_ftnref1" name="_ftn1"></a>
There are two main routes for fine wine investors to save on CGT. The first is if the fine wine has an expected life of fifty years or less. If so, it’s considered to be a “wasted chattel”, and is exempt. The second avenue is if the bottle is sold for less than £6,000. In this circumstance, the transaction is also outside the scope of CGT.
It’s worth noting that investors may still need to pay for storage costs, inheritance, and income tax. To find out more, download <a href="https://winecap.com/learn/fine-wine-taxation-2022" target="_blank" rel="noopener">our complimentary 2022 Guide on Fine Wine Taxation</a>. While this document is intended to be helpful, it is not advice. To find the best solution for you, speak to a tax advisor.
<h3>&#8230; Looking to get started?</h3>
If you’re interested in learning more about the benefits of investing in fine wine, <a href="https://winecap.com/start-investing" target="_blank" rel="noopener">we’re here to support you on your journey</a>.
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[1] Source: <a href="https://www.liv-ex.com/2022/08/liv-ex-august-market-report-released-5/" target="_blank" rel="noopener">Liv-ex</a>
[2] Source: <a href="https://finance.yahoo.com/quote/%5EGSPC/chart?p=%5EGSPC#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" target="_blank" rel="noopener">Data from Yahoo Finance</a>
[3] Source: <a href="https://www.investopedia.com/ask/answers/041015/what-history-sp-500.asp#:~:text=The%202008%2D09%20Financial%20Crisis%20and%20Great%20Recession&amp;text=The%20decline%20was%20the%20largest,index%20since%20World%20War%20II." target="_blank" rel="noopener">Investopedia</a>
[4] Source: <a href="https://www.liv-ex.com/2018/09/fine-wine-market-past-present-future/" target="_blank" rel="noopener">Liv-ex</a>
[5] Source: <a href="https://goldprice.org/gold-price-history.html" target="_blank" rel="noopener">Gold price</a>
[6] Source: <a href="https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/housepriceindex/january2020#:~:text=1.-,Main%20points,to%20%C2%A3140%2C000%20(2.5%25)." target="_blank" rel="noopener">ONS</a>
[7] Source: <a href="https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/housepriceindex/july2022" target="_blank" rel="noopener">ONS</a>
[8] Source: <a href="https://www.craftbrewingbusiness.com/news/drizly-examines-how-recessionary-economics-impact-alcohol-purchasing/" target="_blank" rel="noopener">Craft Brewing Business</a>
[9] Source: <a href="https://www.thedrinksbusiness.com/2021/09/fine-wine-sales-boosted-by-pandemic-research-reveals/" target="_blank" rel="noopener">The Drinks Business</a>
[10] Source: <a href="https://www.liv-ex.com/2022/06/rising-value-champagne-magnums/" target="_blank" rel="noopener">Liv-ex</a>

How Does Fine Wine React in a Recession?

Masi is celebrating a significant milestone this year: the 250th harvest from its vineyards located in the ‘Vaio dei Masi’, a small valley in the heart of Veneto’s Valpolicella Classica region in Italy. The Boscaini family has tended the vines over the centuries to create today’s world-class wines.
‘This is the story of an inseparable bond of a surname, “Boscaini” and a place name “Vaio dei Masi”, driven by the work of those same members of the family who, over the generations, have cultivated the vines, transformed the grapes into wine and marketed it. At the same time, it is fused with the events involving that original, founding vineyard, how it was acquired and later integrated into ever greater properties, how its name has marked the human and entrepreneurial path taken by my family, through to today’s Masi Agricola S.p.A.’ commented President of Masi Agricola, Sandro Boscaini.
In honour of this landmark achievement, Masi threw a spectacular event with a guestlist that included seven generations of the Boscaini family, prominent Italian winemaking figures and international press. 
<h2>Masi&#8217;s &#8216;Monument to Amarone&#8217;</h2>
While recognising its past and Masi’s forefathers, the event was also an opportunity to showcase what the company’s new headquarters will look like, its construction delayed due to the pandemic. Named ‘Monteleone 21’, this new site will also encompass its ‘Masi Wine Experience’, helping visitors connect with this heritage-rich wine brand in a very modern building ‘powered by solar panels and geothermal energy’. The drying facility will undoubtedly be its biggest spectacle, with racks reaching some 12 metres high with bunches of Corvina, Molinara, Rondinella and Oseleta grapes drying out. Masi’s managing director, Federico Girotto, proclaimed it will be ‘a monument to Amarone’.
The event culminated in bottles of the 1997 Amarone being opened, with guests toasting to both this 250-year milestone and to the company’s future 250 years, which look sure to be full of innovation.
Interested in finding out more about investment-grade Italian wines? Read our article on <a href="https://winecap.com/news/our-top-list-of-tuscan-wines-for-investmen" target="_blank" rel="noopener">Tuscan wines to invest in</a>.

Masi Celebrates its 250th Harvest

Our Q3 report, analysing the trends that shaped the fine wine market over the past three months, is available to download. The report examines the impact of currency volatility on fine wine prices, the consistent demand for Champagne, the brands on the move and the expansion of the autumn La Place de Bordeaux campaign.
The global economic slowdown intensified in the third quarter of the year, due to continued high inflation, supply chain problems and tighter financial market conditions. Contrary to the dim outlook for mainstream markets, alternative assets like fine wine performed well. The leading fine wine indices made gains this quarter, largely driven by Sterling weakness. The US Dollar hit historic highs against the pound, increasing the purchasing power of USD buyers who took advantage of the newly created opportunities.
Champagne was once again in prime focus. Its market share increased from 11.2% in Q2 to 15.8% in Q3, while its price index rose 5.4% over the past three months. It is now the best performing region over one year, outperforming even Burgundy. Bordeaux also enjoyed increased demand, particularly for ‘on’ vintages like 2009, 2010 and 2019. This autumn saw the anticipated revision of its Saint-Émilion classification, with the promotion of Château Figeac to Premier Grand Cru Classé A status. Following the announcement, many of Figeac’s older vintages like 2008 and 2013 set new pricing records.
All of the top-performing wines can be seen on <a href="https://winecap.com/wine-track" target="_blank" rel="noopener">Wine Track</a>, which helps investors track wine prices over any given period.
The past three months also welcomed many new wine releases via La Place de Bordeaux, including the 2019 vintage of the Super Tuscans Masseto and Solaia and the Napa Valley icons Cardinale and Joseph Phelps Insignia. The campaign has now expanded to over 100 wines from 32 regions across 11 countries. Our Q3 report points out some of the best value opportunities.
WineCap’s independent market analysis showcases the value of portfolio diversification and the stability offered by fine wine. Download this report for your summary of the past quarter in fine wine.

Q3 2022 | Report

The Bordeaux-based Edmond de Rothschild Heritage Group has received approval from New Zealand’s Overseas Investment Office to purchase the Akarua winery and vineyard. This takeover will enable the group to make its first organic wines.
The 52-hectare Akarua estate is located close to Cromwell in the Central Otago region. The group intends to convert the vineyard to organic viticulture. 
However, this is not The Rothschild Group’s first New Zealand purchase, it made a joint purchase in 2012 with Craggy Range of the 24-hectare Rimapere vineyard in Marlborough that is planted with Sauvignon Blanc.   
Commenting on the purchase, president of the Edmond de Rothschild Group – Ariane de Rothschild – highlighted that the Bannockburn soils were ‘on par with the Burgundy region’ and that they had the potential to create some of the world’s finest Pinot Noir.
Expanding further on the group’s strategy, she said: ‘The addition of our second New Zealand winery is part of our wider strategy to develop a portfolio of premium international wines from exceptional terroirs. Central Otago’s international reputation for Pinot Noir provides a unique opportunity for us to complete our range and move into the production of organic wines – one of the fastest growing categories.’
‘The purchase of Akarua has seen us add a winery with strong growth potential to our portfolio, expanding our Pinot Noir offering and solidifying our position as a premium producer that sells wines exclusively produced from our own vines,’ commented chairman of Edmond de Rothschild Heritage, Alexis de La Palme.
Sir Clifford Skeggs founded the Akarua estate in 1996. David Skeggs, managing director of the Skeggs Group, said of the recent acquisition: ‘It is not without sadness that we hand over the Akarua legacy to Edmond de Rothschild Heritage… But we are equally as excited to follow the brand’s future in New Zealand and overseas.’
Akarua currently produces over 60,000 bottles annually for both domestic and export markets. The wine will continue to be made and, from the 2023 vintage and beyond, certain elements of the Rothschild’s family crest will be included on the label. 
Edmond de Rothschild Heritage owns assets in wine, hotels and farming. Iconic wine brands in its portfolio include: Bordeaux’s Château Malmaison and a leading stake in Château Lafite Rothschild, Vega Sicilia in Spain and Rupert &amp; Rothschild Vignerons – with the Rupert family – in South Africa’s Franschhoek Valley.

Rothschild Group to Expand into Central Otago

While the plummeting pound may be bad news for many stock market investors in the UK, overseas fine wine collectors can pick up once-in-a-lifetime bargains. In this article, we’ll uncover why the strong dollar and weak pound represent a unique opportunity for investors in the US and Asia.
<h2>The pound has fallen, fine wine has not</h2>
To avoid dealing with burdensome conversion rates, fine wine is generally traded in sterling. Bottles from all over the world are listed and compared in British pounds on the global market.
This means that as the foreign exchange rates ebb and flow, the prices of the wine can seem more or less expensive to overseas investors. For example, on the 12th of February 2018, a bottle costing £1,000 would have set back US buyers $1,402.60. The following month, on the 12th of March 2018, the same bottle costing £1,000 would have come to $1,394.30 [1]. Usually, with stable currencies, you would expect the differences to be relatively marginal. High-end investors probably wouldn’t give too much importance to a couple of dollars difference when they are spending thousands.
Recently, however, the value of sterling has fallen dramatically against the US dollar. The pound has nose-dived to the lowest value in forty years, which is excellent news for opportunistic investors overseas. Buyers who deal in dollars can pick up exquisite wine for exceptionally low prices. On Tuesday 27th September, the same £1,000 bottle would cost US investors just $1,080. For collectors over the pond, Black Friday has come early in the wine markets.
<h2>US &amp; Asian investors surge forward</h2>
Data from Liv-ex shows that many overseas investors have already taken advantage of the plunge in prices. As the pound began to tumble on Friday 23rd September, US buyers became more active. By Monday morning, they had accounted for 39.1% of trade, more than double the previous weekend of 16.9% [2].
Investors in Asia also took part in the advantageous market. Some currencies such as the HK dollar are linked to the US dollar, so investors in Hong Kong could also ride the favourable FOREX wave. But even currencies which are not directly linked to the US currency could benefit from the low sterling.
Although the Chinese Yuan has also suffered historic lows against the US dollar recently, it’s still doing relatively better than the pound. Buying fine wine in sterling means these investors can also benefit from superior exchange rates. Over the weekend from the 23rd to the 26th of September 2022, Asian buyers also accounted for the larger share of Liv-ex trading volumes. Around 11.7% of all movements came from Asian investors in September, up from 8% in August.
<h2>More buyers are (probably) good for the market</h2>
As the old economic theory states, when demand exceeds supply, prices rise. Over the long-term, having a more varied and international group of buyers is likely to be a good thing for fine wine investors. It could lead to higher prices and more liquidity, which is almost always welcome.
As new buyers reveal themselves it will be interesting to see how they react to market events. At the time of writing, fine wine is a <a href="https://winecap.com/learn/how-does-fine-wine-react-in-a-recession" target="_blank" rel="noopener">famously recession-resistant investment</a>. This is partly because the market is niche and not susceptible to stock market fluctuations. However, if too many investors enter, seeking to shield from market shocks with short-term alternative income sources, this could reduce some of wine’s recession resistance.
Overall, however, more buyers – especially those who are less impacted by the value of the pound &#8211; are likely to bolster and raise the fine wine market.
<h2>How long will the low prices last?</h2>
It’s impossible to predict how long the weak sterling will last. What we can say with relative certainty is that the sudden drops over recent weeks have been triggered by internal political events. Specifically, the change of UK Prime Minister, radical tax plans and proposed national deficit increase have spooked investors.
On the morning of the 28th of September, the Bank of England stepped in to buy up government bonds. This saw a small uptick in the strength of the pound, which indicates that it is still possible for the pound to regain some of its power, with the right intervention. We also do not know at this stage if all of the proposed tax cuts and borrowing will go ahead. If they are abandoned, we could see the markets breathe a sigh of relief and the pound could resurface too.
For US and Asian investors looking to buy up exquisite wine at exceptional prices, there’s no time like the present. Precious bottles can also be an <a href="https://winecap.com/learn/is-fine-wine-inflation-proof" target="_blank" rel="noopener">excellent shield against inflation</a>, helping investors maintain the value of their wealth in spite of any market turmoil outside.
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[1] Source: <a href="https://www.macrotrends.net/2549/pound-dollar-exchange-rate-historical-chart" target="_blank" rel="noopener">MacroTrends</a>
[2] Source: <a href="https://login.liv-ex.com/login?state=hKFo2SB3Y2x6b1pKcEhiUXpLeHk2QlF6Q2JoWndvVTlhWjdpaKFupWxvZ2luo3RpZNkgamVaUDZhSzktUUpLdjQzV2p6MWYyM183ckNNM3h4UzajY2lk2SBqMnl5eUdMamowWjFEQWw5aHQ5MXJra2Z3Y21hdjE0OA&amp;client=j2yyyGLjj0Z1DAl9ht91rkkfwcmav148&amp;protocol=oauth2&amp;response_type=token%20id_token&amp;scope=openid%20email%20profile&amp;redirect_uri=https%3A%2F%2Fwww.liv-ex.com%2Flogin_callback%3Ftarget_url%3Dhttps%253A%252F%252Fwww.liv-ex.com%252F2022%252F09%252Fus-buying-rises-sterling-plummets%252F&amp;nonce=f6D7Z3UdL7258zshMtcBOnD9oNerNU28&amp;auth0Client=eyJuYW1lIjoiYXV0aDAuanMiLCJ2ZXJzaW9uIjoiOS4zLjAifQ%3D%3D" target="_blank" rel="noopener">Liv-ex</a>

Fine Wine & Sterling: Opportunities for Asian & American Investors

The French billionaire and luxury goods magnate, Francois Pinault, has revealed a new merger with Maisons &amp; Domaines Henriot. This deal will combine highly sought-after names in fine wine such as Bordeaux’s Château Latour, Burgundy’s Clos de Tart and Champagne Henriot all in one group.
This new group will adopt the name ‘Artémis Domaines’. With this new announcement, it was revealed that Francois Pinault will hold a 75% stake in the group, with the families behind Henriot controlling the remaining quarter.
This merger further consolidates the high-end French fine wine business. In recent years it has attracted investment from both foreign and corporate players, especially in regions such as Burgundy that historically was predominantly made up of boutique, family-run wineries. 
Brands that will now fall under Artémis Domaines include: Burgundy’s Clos de Tart and Domaine d’Eugenie – from the Pinault family – as well as Burgundy’s William Fèvre and Maison Henriot in Champagne, from Henriot. 
According to a statement, this new merger represents ‘a guarantee that a French group will ensure the long-term preservation’ of these brands and their winemaking expertise.
‘The merger of Maisons &amp; Domaines Henriot and Artémis Domaines is a wonderful opportunity to bring together the treasures of our wine heritage under the same banner,’ Francois Pinault commented.
Further afield, Artémis Domaines will also be in charge of producers including Beaux-Frères in Oregon and Eisele Vineyard in California’s Napa Valley. Pinault is 86 years-old and has an estimated fortune of over $30 billion and is also an avid art collector, counting Christie’s in the family’s holdings also. 
This move sees Pinault strengthen the group against the other major luxury player in fine wine and fashion – LVMH – which owns Bordeaux’s Château d’Yquem and Château Cheval Blanc, as well as Burgundy’s Domaine des Lambrays and the Champagne brands Krug and Dom Pérignon. Read more about LVMH&#8217;s <a href="https://dev.winecap.com/news/lvmh-buys-top-californian-winery-joseph-phelps" target="_blank" rel="noopener">recent acquisition of California&#8217;s Joseph Phelps</a>.

Pinault Family forms Merger with Maisons & Domaines Henriot

The Burgundy Wine Board (BIVB) announced that the wines from the 2022 Burgundy harvest have real ‘potential’. This vintage will be dedicated to Louis Fabrice Latour, the former president of the trade association, who passed away earlier this month.
Commenting on the recent harvest, the BIVB said that it had been ‘a pleasant surprise’ and that it was ‘a vintage of the kind we were all hoping for.’ Despite cold temperatures and frosts, the board is happy with both the quantity of grapes that will go into this year’s wines as well as their quality.
<h2>The 2022 Burgundy Vintage</h2>
The growing season began at the start of April having experienced a milder winter with less rain than usual. Temperatures dropped mid-April and two snaps of frost followed. Fortunately, budburst hadn’t taken place completely and buds were not fully exposed to the frosts, although some areas did experience small amounts of damage. 
Spring arrived and brought excellent conditions with it. Flowering took place two weeks earlier than usual which led to many commentators suggesting that the 2022 vintage could be one of the earliest ever. Thunderstorms in late June refreshed the vines but also brought some hailstorms which caused ‘significant damage’ in some areas.
Contrary to the belief that the harvest would start earlier than normal, pickers started harvesting Chardonnay on the 20th of August which is in line with previous years. It was a prolonged harvest due to the good weather which helped produce optimally-ripe grapes. 
The board agreed that this year’s grapes are ‘balanced with controlled degrees of alcohol and good acidity.’ It found that the compounds in the red grapes were ‘excellent’ which are needed for long-term ageing. The BIVB also commented that the musts of the whites and reds were ‘highly aromatic’ which is another positive sign. 
This year’s harvest is what the Burgundians had hoped for, as the 2021 vintage suffered very low yields and in turn triggered higher prices. However, 2022&#8217;s yields were still down on average.
Find out more about our initial thoughts on the Burgundy 2022 vintage <a href="https://winecap.com/news/why-the-2022-burgundy-vintage-is-looking-more-promising" target="_blank" rel="noopener">in this article</a>.

The 2022 Burgundy Wines’ Real Potential

One of the oldest wineries in Napa Valley’s Stags Leap District has appointed Ludovic Dervin as Senior Winemaker and General Manager. Christophe Paubert has managed the winery for 13 years and will retire after the 2022 harvest and return to France, his home country. Both Dervin and Paubert will work together on this year’s vintage.  
A fellow Frenchman who’s originally from the Champagne region, Dervin has been making wine in California since the 1990s. His CV boasts such prestigious wineries as Kendall Jackson’s Vérité, Hartford Court and Mumm Napa.
‘We believe Ludo’s global experience, diverse background and passion for producing world-class wines makes him an excellent choice to continue the Stags’ Leap Winery legacy,’ commented Rachel Ashley, Sr. Vice President, Supply, for Treasury Americas. ‘Christophe’s commitment to quality, authenticity and sustainability has made a profound impact on Stags’ Leap Winery and we feel fortunate that he led this historic property for many years.’
Dervin was attracted to Stags’ Leap’s signature style of winemaking in particular and commented that he’s ‘thrilled to join Stags’ Leap Winery as its newest caretaker and for the opportunity to work with a brand that is known for its refined elegance, finesse and level of traditionality that really showcases the incredible quality of the fruit.’ He also added that he’s ‘look(ing) forward to taking the leap into its newest chapter.’
Stags’ Leap Winery was established in 1893 in the eponymous Stags Leap District and continues to use traditional techniques to create estate wines from a 240-acre property situated on dark, well-drained volcanic soils. While the estate is best known for its classic Cabernet Sauvignon and Chardonnay, this authentic, time-tested brand is also admired for its expressions of Sauvignon Blanc, Petite Syrah and Viognier.
Read more about Shafer Vineyard’s recent purchase of a nine-hectare vineyard in the <a href="https://winecap.com/news/shafer-vineyards-buys-stags-leap-district-vineyard" target="_blank" rel="noopener">Stags Leap District here</a>.

Stags’ Leap Winery Appoints New Head Winemaker

Bordeaux’s Saint-Émilion Classification is reviewed each decade and the seventh edition has now been released for 2022. 
Both the wine trade and wine lovers across the globe have been expectantly waiting for this new edition as the classification has experienced unprecedented withdrawals over the past year and a half. Châteaux Angélus, Ausone and Cheval Blanc – all Premier Grand Cru Classé A – decided not to be a part of the classification over the past 14 months as they felt too much emphasis was being placed on brand building and not on the wine itself. And, in June earlier this year, Château la Gaffelière (status ‘B’) also withdrew, highlighting a concern with tasting notes it was being given.
Château Figeac has now been promoted to Premier Grand Cru Classé A status where it joins Château Pavie. There was a real sense of disappointment when Figeac wasn’t promoted in 2012 so there will be plenty of celebrations for this well earnt result. 
Châteaux Canon and Troplong Mondot have both been working hard to gain promotions, although it wasn’t to be this time round. Interestingly, there were also no demotions, leading some commentators to speculate that the commission had played it safe in order to avoid attracting any further controversy.
While there may have been withdrawals and lawsuits recently, more than 140 estates are estimated to have applied to the commission. Ten years ago there were around 90. This demonstrates the value of the classification and what it means for those fortunate enough to be included in it: the opportunity to command higher prices for their wines.  
Below you can find a full list of the producers featured in the new Saint-Émilion Classification for 2022. 
Interested in finding out more about the recent Bordeaux Blanc harvest? Read our <a href="https://winecap.com/news/bordeauxs-earliest-ever-harvest" target="_blank" rel="noopener">recent article here</a>.
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PREMIERS GRAND CRUS CLASSÉS
Château BEAU-SEJOUR BECOT
Château BEAUSEJOUR HERITIERS DUFFAU LAGARROSSE
Château BELAIR MONANGE
Château CANON
Château CANON LA GAFFELIERE
Château FIGEAC (Distinction A)
Château LARCIS DUCASSE
Château PAVIE (Distinction A)
Château PAVIE MACQUIN
Château TROPLONG MONDOT
Château TROTTEVIEILLE
Château VALANDRAUD
CLOS FOURTET
LA MONDOTTE
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GRANDS CRUS CLASSÉS
Château BADETTE
Château BALESTARD LA TONNELLE
Château BARDE-HAUT
Château BELLEFONT-BELCIER
Château BELLEVUE
Château BERLIQUET
Château BOUTISSE
Château CAP DE MOURLIN
Château CHAUVIN
Château CLOS DE SARPE
Château CORBIN
Château CORBIN MICHOTTE
Château COTE DE BALEAU
Château CROIX DE LABRIE
Château DASSAULT
Château DE FERRAND
Château DE PRESSAC
Château DESTIEUX
Château FAUGERES
Château FLEUR CARDINALE
Château FOMBRAUGE
Château FONPLEGADE
Château FONROQUE
Château FRANC MAYNE
Château GRAND CORBIN
Château GRAND CORBIN-DESPAGNE
Château GRAND MAYNE
Château GUADET
Château HAUT-SARPE
Château JEAN FAURE
Château LA COMMANDERIE
Château LA CONFESSION
Château LA COUSPAUDE
Château LA CROIZILLE
Château LA DOMINIQUE
Château LA FLEUR MORANGE
Château LA MARZELLE
Château LA SERRE
Château LANIOTE
Château LAROQUE
Château LAROZE
Château LARMANDE
Château LA TOUR FIGEAC
Château LE CHATELET
Château LE PRIEURE
Château MANGOT
Château MONBOUSQUET
Château MONTLABERT
Château MONTLISSE
Château MOULIN DU CADET
Château PEBY FAUGERES
Château PETIT FAURIE DE SOUTARD
Château RIPEAU
Château ROCHEBELLE
Château ROL VALENTIN
Château SAINT-GEORGES (COTE PAVIE)
Château SANSONNET
Château SOUTARD
Château TOUR BALADOZ
Château TOUR SAINT CHRISTOPHE
Château VILLEMAURINE
Château YON-FIGEAC
CLOS BADON THUNEVIN
CLOS DE L’ORATOIRE
CLOS DES JACOBINS
CLOS DUBREUIL
CLOS SAINT-JULIEN
CLOS SAINT-MARTIN
COUVENT DES JACOBINS

Updated Saint-Émilion Classification Announced

The Chilean fine wine ‘Seña’ has released a second label called ‘Rocas de Seña’.  This new 2020 vintage was sold via La Place de Bordeaux along with its older sibling. Both labels sold out within hours of their release on the market on the 1st of September.
Both wines hail from the same area, a remote and biodynamically-farmed estate in the Aconcagua Valley. However, the grapes that go into the blend differ in both expressions. 
Over half of Seña is made with Cabernet Sauvignon (53%), with Malbec (25%) and Carmenère (15%) in support. Petit Verdot completes the blend, adding the final 7%. However, the main grape variety in Rocas de Seña is Malbec (38%) and has no Carmenère. Syrah (25%), Cabernet Sauvignon (15%) and Grenache (14%) also feature, with Petit Verdot adding a final flourish of 8%.
Just under 3,000 cases were made of the first vintage of Rocas de Seña, that’s around half the annual production of the Grand Vin.
Seña’s 2020 vintage was released up 6.2% on 2019’s opening price and is offered at £1,029 per 12x75cl case. Rocas de Seña 2020 is being offered under half the price of the Grand Vin at £426 per 12x75cl case.
Winemaker Francisco Baettig said at a tasting in London that he wanted Rocas de Seña to have its own character which is why he selected different grape varieties.
‘I did not want to make a copy of Seña just with younger parcels (of vines), I wanted to give a personality to Rocas, which is why I used Malbec as a base instead of Cabernet and some Mediterranean varieties, with Syrah and Grenache,’ he commented.
He added that Petit Verdot’s inclusion in the blend was important in order to create ‘tension’ in the wine, which is needed in this part of Chile, as well as in the moderately hot, dry 2020 vintage.
His aim is for ‘Rocas… not to be a Cabernet-based wine – we have that with Seña, as well as Chadwick and Don Max.’

New ‘Rocas de Seña’ Label Released

Producers in Bordeaux welcomed the rain and cooler temperatures that arrived at the start of August with open arms. After six weeks of no rain, and with a prolonged heatwave, July of 2022 was announced as the driest on record since 1959.
The first white grapes of one of the key varietals that makes up the Bordeaux Blanc blend – Sauvignon Blanc – began arriving at wineries in the communes of Entre deux Mers, Graves and Pessac-Léognan from the 16th of August. The 2003 harvest that was previously considered very early, began on the 18th of August, making 2022 now the earliest ever vintage.       
The president of the Pessac-Léognan syndicate, Jacques Lurton, commented on this ‘earliest ever harvest,’ to French press agency AFP. He said that it was caused by ‘the exceptional conditions of the year that have speeded up ripening. Right now the aromatics are high in Sauvignon Blanc, making it the perfect moment to start bringing them in’.
Yields are expected to come in slightly under the 50-year average and are predicted to be between 13-21% higher than the 2021 harvest that was severely affected by frost. While there was a summer drought this year, both flowering and fruit set took place at the perfect time which meant that yields weren’t impacted too much.
The recent rain, up to 20mm in the majority of communes, has helped refresh soils and vines, as well as increasing the size of the grapes which are reportedly still some 30% smaller than usual.  
However, Bordeaux hasn’t been the only French wine region to have begun harvesting grapes early this year. The Rhône began on the 22nd of August: eight days earlier than last year. Roussillon also started picking grapes as early as the 3rd of August. Producers in both regions have expressed that, while the production levels may be down on average, they’re hopeful that great quality wines will be made.
Read more about the small but exceptional Port vintage expected in the Douro <a href="https://winecap.com/news/small-but-exceptional-port-vintage-expected" target="_blank" rel="noopener">here</a>.

Bordeaux’s ‘Earliest Ever’ Harvest

As the Port producing region of the Douro has just begun grape harvesting, producers are expecting dramatically reduced yields this vintage due to the impact of extreme heat and drought conditions that have characterised 2022. 
This year’s rainfall is more than 70% lower than the 30-year average and follows on from three years of below-average rainfall. Producers in the region are becoming increasingly concerned about this series of drier years. They are most worried about their younger vines as they are more susceptible to drought and hydric stress as the roots don’t reach as far down into the ground as those of older, established vines.
Less rainfall means reduced grape yields which in turn means higher production costs for winemakers at a time where there are other inflationary pressures at play. 
Another factor that has exacerbated the lack of rain is the combination of heat and wind. CEO at Taylor Fladgate, Adrian Bridge, commented that ‘the wind normally picks up at 6pm, but at 2pm it has been whistling up the (Douro) valley – having a hairdrier effect on the vines, so the grapes are shrinking’. He added that this has contributed to the grapes having very thick skins this year and a lot more grapes will be required to make the same quantity of Port.
‘I believe that this is going to be one of the lowest yielding harvests ever in the Douro,’ commented former chairman of Symington Family Estates, Paul Symington
However, while producers will have to wait over the coming weeks to see just how much wine it will be possible to make, there’s a sense of optimism among the Douro winemakers that this year’s vintage will turn out to be a small but exceptional one. 
Christian Seely, managing director at Quinta do Noval, commented that: ‘The occasional hot dry year is not a disaster and can produce remarkable, memorable wines: ‘45 and ‘17 had that sort of profile and both of them produced some of the most remarkable vintage Ports ever produced – and in 2017, remarkable red wines too, to my surprise’.

Small but Exceptional Port Vintage Expected in the Douro

China has suspended all imports from Australia and New Zealand, including wines, dairy products and beef, according to the country’s official logistics trade association: China Federation of Logistics and Purchasing (CFLP). The ban is set to significantly escalate tensions between China and its Pacific neighbours.
In a post by the Food Ingredients Supply Chain Association under the country’s official logistics trade association (CFLP), it announced that on the 15th of August an order had been given which requests incoming cargo wait at each port for further notice.
The news has not been officially announced by the Chinese Customs Administration, but the association highlighted that relevant organisations working in customs and logistics have already been informed.
It’s currently unknown whether this will be a temporary ban or long-term one. While the CFLP hasn’t given its reasons for the ban, it did cite Australia&#8217;s revoking of the ‘One Belt, One Road’ deal as having damaged mutual trust between the nations.
What’s made the situation even more confusing is that within just 24 hours after the CFLP published its article, it was deleted. Anyone now trying to open the WeChat post is presented with an error message that says ‘the article has been deleted by the author.’
<h3>Trade</h3>
New Zealand’s exports to China totalled US$22.83 billion in 2021 with the main products being lamb, butter and cheese.
Australia and China’s relations have been worsening since 2017. Recently, tensions were heightened due to the origin of Covid, 5G and Huawei that resulted in China imposing hefty tariffs in 2020 on Australian goods such as wine and barley.
Despite the tensions between the two nations, China is still Australia’s number one trade partner, with the Asian country having imported US$164 billion, over 40% more in value than a year ago according to China’s Ministry of Commerce.
If legitimate, the ban would be a huge blow to bilateral trade as the administration in Canberra has been in talks with the Chinese for over two years in a bid to repair relations.
What’s more, the timing couldn’t be worse as 2022 marks the 50th anniversary of diplomatic relations between China and Australia.

Australia and Chinese flags with tear in middle

China Suspends all Imports from Australia & New Zealand

In a year of drought, heatwaves and fires, producers in the three Bordeaux appellations of Pessac-Léognan, Pomerol and Saint-Émilion have been given special dispensation to water their vines. 
The lack of rain this year has been so pronounced that Météo France, the French national weather service, declared that July of 2022 was the driest on record since 1959. Irrigation is usually banned in the region from the 1st of May onwards. However, producers sent a request to the regulatory body, the Institut National de l’Origine et de la Qualité (INAO), which issued a derogation in light of the ‘extreme situation’ facing Bordeaux châteaux. Winegrowers are permitted to water their vines during times of persistent drought with permission and only if the drought ‘disrupts the good physiological development of the vine and ripening of the grapes.’ The vignerons were told by the INAO that their request was granted in this case but to use it when ‘only absolutely necessary’.
In Pomerol, the derogation states that producers must submit their proposals for irrigation two days ahead of any activity, along with the size of the vineyard area and grape varieties to be watered. Grapegrowers must also only use water from wells near the vineyard sites and not from the network.
The threat drought poses to vines, especially young vines, is hydric stress. This means that vines can’t get enough water to flourish and are unable to build up sufficient levels of sugars which delays ripening and harvest. Older vines have deeper roots which can draw water from further underground but vines aged between three to eight years old need the most attention.
The permission to irrigate vines is a much needed lifeline for wine producers this year who have had to deal with April frosts, the June hail storms, fires and a heatwave. With forest fires having started up again around Bordeaux, the region’s châteaux will be praying that the next few weeks bring cooler temperatures and long overdue rain.

3 Bordeaux Appellations Permitted to Irrigate Vines

Legendary Napa producer Shafer Vineyards has purchased a nine-hectare vineyard in proximity to its winery in the Stags Leap District from Screaming Eagle founder Arlie Jean Phillips as part of a $35 million deal.
Shafer Vineyards was acquired earlier this year by the Korean luxury firm, Shinsegae Property, and it has now purchased the nine-hectare Wildfoote Vineyard in the Stags Leap District of Napa Valley. 
The deal has been reported by various news outlets to form at least part of an overall acquisition of some 46 hectares for $35 million. 
In a statement, Shafer Vineyards said that the purchase ‘secures a key source for the winery, ensuring that winemaker Elias Fernandez will continue to select from the best-of-the-best fruit each vintage.’
Cabernet Sauvignon, Cabernet Franc and Merlot grapes are all grown in the Wildfoote Vineyard. Shafer Vineyards&#8217; President Doug Shafer commented on the sale that ‘the real winner in this is the consumer, as it gives our winemaking team the ability to choose the best possible fruit in a given vintage.’
General Manager Matthew Sharp highlighted that ‘this is a once-in-a-generation opportunity to acquire a world-class vineyard property of unequaled caliber’. He added that ‘it’s a great privilege to make this site part of the Shafer Vineyard portfolio.’
Shinsegae Property, the property arm of a Korea-based luxury company, purchased Shafer Vineyards in February earlier this year.
A historic Napa winery founded in 1972, Shafer Vineyards is one of a handful of the region’s producers that helped gain worldwide recognition for its wines.
Commenting on the sale, Doug Shafer added: ‘for those who are fans of our wines and our team, you’ll see a continuation of everything you love about the winery.’ &#8216;There may be some new things down the road that I think you will love and embrace as well.’

Shafer Vineyards Buys Stags Leap District Vineyard

Like a nervous first date wondering if they’ve been stood up, cryptocurrency has kept alternative investors biting their nails, on the edge of their seats and glancing restlessly at the door. As a decentralised asset, it shouldn’t have been impacted by rocketing inflation, rising interest rates or other market shocks. But the theory isn’t holding up. When disaster struck, crypto investors behaved in the same way as the stock markets – if anything, they panicked more. Over recent weeks, crypto enthusiasts felt their stomachs lurch as Bitcoin plummeted to less than the value of creating it [1] &#8230; It’s a punch in the face for hopeful diversifiers who turned to crypto as an alternative asset.
In this article, we’ll uncover seven fascinating and under-used diversifying investments, that truly steer clear of the market. In theory and in practice. ‘Alternative alternatives’ to inspire you as you build (or re-build) your portfolio.
<h2>1. Litigation finance</h2>
The up-and-coming investment that almost nobody has heard of. Litigation investors help people to cover the cost of their legal suit and take a share of the damages if they succeed. This type of finance has the potential to do good for society, while offering an alternative source of revenue to investors. Most recently, it’s being used in greenwashing and climate cases, so <a href="https://winecap.com/learn/5-ways-fine-wine-investments-good-for-environment" target="_blank" rel="noopener">alternative investors can help protect the environment</a> too. The downsides are that it is risky, not possible in every country and can take a while.
<h2>2. Art</h2>
An old favourite for seasoned alternative investors, but still relatively unknown in the wider world of investing. Buying art has the double advantage that you can appreciate and enjoy your investment while you own it. Many affluent investors purchase valuable art from museums, auctions and galleries. But if you’re looking for lower price tags, you could take a chance and buy from undiscovered artists directly … It’s certainly riskier, but if you have a good eye, you might just hit the jackpot.
<h2>3.   Domain names</h2>
Believe it or not, an aptly-named domain can rake in a fortune. Cars.com sold for $872 million. Carinsurance.com swept up $49.7 million. And Insurance.com went for a cool $35.6 million [2]. Not every domain name will be valuable, of course, around a third are never even used. But if you manage to buy a good one, you could reap serious rewards. Better still, this type of investment is completely uncorrelated to the stock market, meaning you can protect yourself from market shocks.<a href="#_ftnref1" name="_ftn1"></a>
<h2>4.   Whiskey</h2>
The water of life, as it’s known in Gaelic cultures, doesn’t just taste good on the lips… it can feel great on the wallet too. While whiskey may not offer the kind of eyebrow-raising returns that fine wine has, over the past years it has enjoyed a steady real return of 7.9% from 2011 &#8211; 2020 [3].
<h2>5.   Comic books</h2>
It’s hard not to smile when you imagine the likes of Wonder Woman, Spiderman, or the Joker in your portfolio. But, as well as being a passion investment, comic books have enjoyed a boost in recent years. According to one alternative investment site, ‘Comics continue to trend upwards with very little signs of the market slowing anytime soon’ [4]. Like fine wine and whiskey, these are much-appreciated collectables which become rarer over time.
<h2>6. Music royalties</h2>
Another fascinating yet little-known alternative investment is in music royalties. When investors own a share of the music rights, they should profit when the sounds are played. For example, in movies, adverts, video games and even cover songs. (Although, of course, there is always the risk that people will use the music without paying up). Investors could also pick up profits from hardware sales, such as the reproduction of vinyl disks or CDs. This is generally one for high net worth investors, as price tags can start quite high. But there are exchange platforms available for cost-conscious players too.
<h2>7. Fine wine</h2>
Our favourite alternative investment is – of course – fine wine. As well as offering <a href="https://winecap.com/learn/what-are-the-benefits-of-investing-in-fine-wine" target="_blank" rel="noopener">stable, yet strong returns of 12.6% CAGR each year</a>, it’s an excellent diversifier too. Unlike many other high-performing assets, the value of fine wine is not correlated to the stock market. Return is largely based on the vintage year, scarcity and storage, so fine wine owners have a lot more control over the value of their investment. This can help reassure investors in times of economic turmoil. What’s more, one advantage investment-grade wine has over other alternative assets is the availability of market data to analyse and a more regular marketplace. If you’re looking to bolster your wealth against market shocks, a 1-3% allocation of fine wine could help you reduce your exposure.
Finding a truly alternative investment takes time and research. Often investors will need to stray away from the beaten track. And, as we’ve seen recently, they may also need to laser through all the crypto-sphere hype too.
Call us old-fashioned, but we believe that the best alternative investments are the ones that have been around the longest. Proving themselves decade after decade, recession after recession and beyond. If you’re interested in learning more about the benefits of investing in fine wine, <a href="https://winecap.com/start-investing" target="_blank" rel="noopener">we’re here to support you</a> on your journey.
&nbsp;
[1] Source : <a href="https://finbold.com/bitcoin-mining-becomes-unprofitable-as-btc-price-falls-to-the-average-cost-of-mining/" target="_blank" rel="noopener">Finbold</a>
[2] Source : <a href="https://alts.co/investing-in-domain-names/" target="_blank" rel="noopener">Alts.co</a>
[3] Source : <a href="https://www.whiskyinvestdirect.com/" target="_blank" rel="noopener">WhiskyInvestDirect</a>
[4] Source : <a href="https://alts.co/category/comic-books/" target="_blank" rel="noopener">Alts.co</a>

7 Under-Used Alternative Investments

The innovative Australian producer Penfolds is pushing winemaking boundaries even further with its soon-to-be-released wine that is a blend of Bordeaux and Australian grapes.
‘Penfolds II Cabernet Shiraz Merlot 2019’ blends Bordeaux-grown Cabernet Sauvignon and Merlot grapes with Shiraz from South Australia. The project was brought to fruition through Penfold’s partnership with Thiénot, a Champagne house that owns Dourthe in Bordeaux.
Peter Gago, Penfolds’ chief winemaker, was delighted at a press conference in London with the imminent release of the new project, but highlighted the logistical problems in shipping a container of French wine to Australia where it was blended with the Shiraz. Both components were from the 2019 vintage, although the Shiraz was six months older due to its grapes having been harvested from vineyards located in the southern hemisphere.
Penfolds’ aim was to make wines sourced from around the world in its ‘house style’. Gago added that the key to making the wines was to have ‘ripe tannins from the start’. 
The wine is being released this month under the label ‘FWT’ (French Winemaking Trial), along with another expression that’s a Bordeaux blend which also forms part of the ‘Collection’. The objective behind this activity is to expand the Penfolds range while keeping its signature character.
Gago commented on this new release, saying: ‘it is done through the Penfolds lens: we are not saying the wine is better, but done in the Penfolds way.’
This is just the beginning of the pioneering Australian brand breaking new ground. One interesting future project would be a blend of Australian Shiraz with Syrah grapes from the Northern Rhône, as the Rhône is the original heartland of Syrah, better known as Shiraz in the New World. Gago confirmed that we might not have too long to wait as a ‘project with the Rhône Valley’ is in the pipeline. 
There’s certainly a lot going on at Penfolds and we’re excited to learn what the next new innovative launch looks like.
Read more about Penfolds&#8217; recent <a href="https://winecap.com/news/penfolds-to-produce-special-made-in-china-bottling" target="_blank" rel="noopener">made in China project here</a>.

Penfolds Innovates New French-Australian Blend

Our Bordeaux 2021 En Primeur Report is now available to download. Read our full analysis of the new 2021 vintage which is considered to be an approachable, good quality one that differs in style to the wines from the three previous years.
2021 was the coolest and second wettest vintage in the past decade with frosts, rain and mildew. This meant yields were down significantly in some appellations. Meticulous sorting in both the vineyard and the winery enabled producers to select only the best fruit and this created the finest wines possible. 
Critic reports suggested that quality was better than expected and there is a selection of outstanding wines on offer that will bear comparison with the very best and various châteaux have produced some of their highest ever rated wines.
Prospective buyers have been expectantly waiting for the 2021 vintage’s scores and prices. Release prices were expected to be lower than those of the top rated trilogy of 2018, 2019 and 2020 as this is a different style of vintage from a challenging year. However, there were economic reasons that could justify price rises such as inflation, wine shortages and the US dollar’s appreciation against the Euro.
In general, wines have been released at the same price as 2020 &#8211; just 1% lower on average. However, some châteaux released at up to 15% discounts, while others at up to a 15% premium with lower scores than last year.
Discover our analysis and the fine wines we recommend fully in this report. While it was a mixed vintage, there are some excellent wines on offer at attractive prices.

Bordeaux 2021 | Vintage Report

The UK recorded some of the highest temperatures on record at over 40°C on the 20th of July and fires broke out across England. For the WineCap team that was in Bordeaux at the time, it was an all too familiar scene.
France, like other countries on the continent, has endured sweltering temperatures in recent weeks. The combination of the mercury rising and the tinder-dry ground have provided the perfect conditions for forest fires which have ravaged large parts of South and South-West France since the 12th of July. Around Bordeaux, over 6,500 hectares have already been burnt in the Landiras commune and over 3,000 have been scorched in La Teste de Buch according to the <a href="https://emergency.copernicus.eu/mapping/list-of-components/EMSR592" target="_blank" rel="noopener">Copernicus</a> website.
While no vineyards have been directly affected yet, the fires have come too close for comfort for some producers. Loic Pasquet, owner of Liber Pater, based in the previously mentioned Landiras commune just North-West of Sauternes, revealed that a fire had come almost within 500m of his vines. Fortunately, it has now been fought back to 7km away.
Some 2,000 firemen and a combination of sea planes and water bombers have been battling the blazes in the region. This, combined with temperatures dropping from 41°C to ten degrees cooler, has provided a much needed respite and the forces are currently optimistic that they will be able to contain the fires unless circumstances change.        
Although Bordeaux has experienced large scale fires before – in 1949 and 1989 – none have been as severe as these. For wine lovers, the risk of fires and smoke taint affecting wineries and grapes is something that they’ll probably have read about most with California wines. In 2020, Napa’s ‘Glass Fire’ caused wineries Cain, Newton and Behrens Family on Spring Mountain to suffer complete losses.
It’s too early to tell in Bordeaux if smoke taint has affected grapes and therefore the 2022 vintage. Producers who think their vineyards may have come into contact with the smoke are being urged to take samples and perform tests. The mood in Bordeaux remains optimistic, but with the August and September months still to go before harvest, we’re sure many producers are keeping everything crossed.

Heatwave Provokes Bordeaux Fires

WineCap CEO Alexander Westgarth spoke to Forbes Advisor&#8217;s Andrew Michael about wine investment&#8217;s benefits and long-term performance. Below is a summary of the &#8216;How to Invest in Wine&#8217; article which you can read <a href="https://www.forbes.com/uk/advisor/investing/how-to-invest-in-wine/" target="_blank" rel="noopener">in full here</a>.
2021 was a good year for wine investment, as reported by Knight Frank’s Wealth Report released earlier this year. In fact, fine wine shared the top spot in the &#8216;alternative investments&#8217; category with collectible watches. Both delivered a 16% return over the course of a year.
More and more money is being invested in the wine market. Alexander Westgarth highlighted fine wine&#8217;s solid and consistent returns over the past 15 years, with compound annual growth of 8% and some regions, such as Burgundy, delivering 12.5%.
In the current economic climate, traditional asset classes, including stocks and shares, aren&#8217;t performing as well as they historically have. The US stock market has entered a &#8216;bear market&#8217; and is down 20% since January this year.
More and more investors are considering tangible assets as they are less likely to be affected by market fluctuations.
Mr Westgarth commented that &#8216;wine is a low-stress investment that doesn’t require constant attention, or frequent trading in and out of.&#8217;
Other advantages of investing in wine and advice include:
&#8211; There is no capital gains tax to pay on profits. HMRC classifies wine as a &#8216;wasting asset&#8217; as it determines the wines to have a lifespan of fewer than 50 years.
&#8211; Think about working with a reliable investment specialist that can build a portfolio for you, manage storage and insurance, keep you updated with valuations and advice and eventually manage the sale of your investment.
&#8211; Consider an initial investment of between £5,000 and £25,000. Even at the lower end, you can start building a portfolio with exposure to different wine regions.
Want to find out more about how to get started investing in wine? Download our <a href="https://winecap.com/download-guide" target="_blank" rel="noopener">free guide here</a>.

WineCap in Forbes Advisor

A magnum of Château Avenue Foch 2017 has sold for a record-breaking US$2.5 million at auction, making it the world’s most expensive Champagne and perhaps the world’s most expensive wine. Interestingly, the magnum wasn’t the sole item in the auction lot. The Champagne also came accompanied by an NFT – a non-fungible token – a digital image that trades on the blockchain. The NFT is of a ‘Bored Ape Mutant’ whose face features on the bottle and that was designed in collaboration with the artist Mig. It also includes the digital image’s intellectual property rights.
The British entrepreneur Shammi Shinh was responsible for commissioning and selling the bottle and whose aim was to boost NFTs’ profile through associating it with the luxury fizz. ‘I&#8217;m hoping for more awareness — I want people to understand NFTs now’, he commented. Shinh also hinted that this may be the first in a series of limited edition bottlings. 
The successful buyers at auction were brothers Giovanni and Piero Buono. They are Italian investors in cryptocurrencies, as well as in fashion and technology markets. However, while they are involved with cryptocurrencies, the purchase was reportedly made in dollars &#8211; as first reported by the <a href="https://www.wsj.com/articles/most-expensive-bottle-of-champagne-sold-for-2-5-millionnfts-included-11657636077" target="_blank" rel="noopener">Wall Street Journal</a>. Giovanni confirmed to the paper that they have no plans to open the bottle.
Château Avenue Foch is a new Champagne brand that’s made from Premier Cru grapes grown at the family-owned estate of Allouchery in Chamery.
Want to discover the ten most expensive wines in the world? From Burgundy to Bordeaux, we’ve put together a list of the world’s most expensive bottles, and their intriguing stories, in our <a href="https://winecap.com/news/ten-of-the-most-expensive-wines-in-the-world" target="_blank" rel="noopener">article here.</a>

Bottle of Champagne Avenue Foch on table with glasses

Champagne Sells for Record $2.5 Million at Auction

Our Q2 Report is now available to download. In it, we examine the wine investment trends that shaped the fine wine market over the past three months. The report looks at how inflation and the possibility of recession have impacted fine wine, the success of the 2021 Bordeaux En Primeur campaign, the top-performing regions and the most in-demand wines.
Fine wine proved itself as a stable investment in the second quarter of the year, which was characterised by exacerbated economic pressure. As stagflation worries grew, equities experienced increased volatility and some entered bear markets. Meanwhile, fine wine prices continued their steady ascent and even outperformed safe haven assets like gold. The best-performing wines were blue-chip labels, which attract regular demand, hinting at narrowing focus and increased caution in the current economic situation.
On a regional level, Burgundy and the Rhône experienced the biggest price rises. The top-performing wines can now be seen on Wine Track, our latest tool, which helps you track wines’ price performance over any given period at a wine label level.
In Q2, Champagne and California continued to trade actively, with Louis Roederer Cristal cementing its place as the most in-demand Champagne. The 2021 Bordeaux En Primeur campaign stimulated interest in previous vintage wines, which presented many good value wine investment opportunities. Some of the most successful 2021 releases included the First Growths and their second wines, Châteaux Lafleur, Calon Ségur, Les Carmes Haut-Brion, Léoville-Barton, Ausone and Cheval Blanc.
The third quarter will throw the spotlight on releases from the Rest of the World, with the La Place de Bordeaux campaign taking place in September. Almaviva, Opus One, Vérité, Seña, Catena Zapata, Masseto and Solaia are few of the star names that will offer their latest vintages internationally, with many more new additions. The next three months will also further test the bullishness of the fine wine market.
WineCap’s independent market analysis showcases the value of portfolio diversification and the stability offered by investing in wine. Download our brand new quarterly report for your summary of the past quarter in fine wine.

Q2 2022 | Report

With an increasing number of investors looking to alternative investments, and in particular fine wine, WineCap&#8217;s CEO Alex Westgarth explores why this sector has risen to prominence in recent years in <a href="https://www.wealthadviser.co/2022/07/01/310060/fine-wine-investing-during-market-volatility-and-uncertainty" target="_blank" rel="noopener">Wealth Advisor</a>. Read his opinion piece in full below:
&#8216;Although wine is mainly known for its leisure benefits, many would be surprised to discover that fine wine investments can provide both stability and returns to investment portfolios during times of market volatility and uncertainty.
Fine wine investing can be a safe haven for investors in times of instability. As global markets experience increased levels of volatility due to factors such as the conflict in Ukraine, the threat of rising interest rates and spiking inflation, investors are exploring different ways to shield their wealth and assets.
We cannot predict what ways the current factors will affect the economy and financial markets and many experts expect volatility will stick around even when these short-term drivers have faded away. Therefore, investing in more stable options, such as fine wine, has grown in popularity in recent months.
Fine wine’s ability to hold its value through times of instability can be seen from historic data. At the start of the 2008 recession, the Liv-ex Fine Wine 1000, which tracks 1,000 wines from across the world, dropped 10 per cent from its peak in August 2008 to a low in December of that year. But by early 2009, it began a steady recovery and recouped all its losses by the end of 2009.
In contrast, the FTSE 100 fell 47.82 per cent and took over five years to return to pre-2008 levels. More recently, the first quarter of 2020 saw stock markets spiral down in the wake of COVID-19. While the S&amp;P Global Luxury Index fell 23 per cent, the Liv-ex Fine Wine 1000 slipped just 4 per cent and had already begun its recovery by May 2020.
How is fine wine able to maintain such stability? As with the very nature of wine itself, the longer you hold on to it, the more valuable it becomes; and in investment terms, the more consistent your returns become. This is because, over the long-term, the demand-supply imbalance is exacerbated by increasing consumption and subsequently decreasing availability, and therefore wines become more desirable due to rarity and improvements in quality as they age.
Furthermore, the fine wine market is self-contained and, to a large extent, divorced from equity markets. This is because the value of the wine market is not determined by a single economy, rather, it shadows the movement of wealth around the world.
This unique characteristic means it is less vulnerable to the fluctuations witnessed in conventional equity markets which ultimately allows people to safeguard their investments and distance themselves from the exposure that traditional investors are often forced to endure. Moreover, the wine investment market provides flexibility as it is less open to fashionable interpretation compared to most other luxury collectables.
Particularly, when market volatility increases or economic conditions go south, investors acknowledge that fine wine can offer great capital preservation, real value growth and a way to diversify a portfolio away from the most volatile assets. Good wine will always be in demand, which means long-term returns will continue to be supported by consistent consumption.&#8217;

Fine Wine Investing during Market Volatility & Uncertainty

The French luxury goods house LVMH has announced that it is expanding its portfolio of northern Californian wineries with the purchase of high-end producer Joseph Phelps. 
Phelps has produced sought-after bottles from Napa and Sonoma for almost 50 years. The winery’s top cuvée – Insignia – was one of Napa’s first Bordeaux-style Cabernet blends and helped the region’s new style of wine to gain recognition in the 1970s.
The purchase means that Moët Hennessey has now deepened its foothold in California where it already owns three other wineries: Domaine Chandon, Newton Vineyard and Colgin Cellars.  
Included in the sale is the Phelps brand, winery and inventory, as well as approximately 500 acres in vineyards in Napa and Sonoma counties. No purchase price was disclosed.   
Moët Hennessy Chairman and CEO Philippe Schaus said that Joseph Phelps is ‘an iconic name and an iconic winery’. ‘It’s important for us that we are acquiring a family business with a legacy and heritage. It’s super important that we keep that heritage.’
For Schaus, Moët Hennessy’s aim is to be able to offer ‘all the different moments of consumption’: from apéritifs, Champagne and fine dining wines to bars, clubs and cocktails. The company’s Cloudy Bay brand covers white wines and its Whispering Angel line offers rosé, but, Schaus commented, ‘we were missing a strong red wine.’
It’s clear than LVMH &#8216;s purchase of this Napa stalwart fits comfortably into its portfolio, as Schaus declared: ‘Joseph Phelps has been to the Napa Valley what Nicolas Ruinart, Mrs. Clicquot, Joseph Krug and Claude Moët were to the Champagne region and likewise we will continue to develop this new House in the respect of the founder’s heritage and vision.’

Exterior of Joseph Phelps winery and vineyard

LVMH Buys Top Californian Winery Joseph Phelps

WineCap featured in the &#8216;Money&#8217; supplement of Saturday&#8217;s The Telegraph. You can read <a href="https://www.telegraph.co.uk/money/consumer-affairs/buying-hermes-bags-beat-stock-market/" target="_blank" rel="noopener">Lauren Almeida&#8217;s full article here</a> and find a summary below on how investors are turning to fine wine to protect their savings:
With share prices falling, investors are looking at how fine wines and luxury goods can protect their savings.
Historically, stocks and shares have delivered solid returns over the course of a decade during a bull market. However, with a global recession looming, markets are on a downward trajectory with global stocks down %12 year to date. With inflation at a 40-year high, savvy investors are looking to protect the value of their money through other means.
Rod Peel worked as an engineer at British Gas and is now retired in Bolivia. His portfolio of investment-grade wines are valued at over £1m. &#8216;I started in 2004, when I received a call from my current broker WineCap&#8217;.
&#8216;You only make profits on the wines when you sell them. Otherwise, they sit there gaining hypothetical money. I pay around £1,000 for storage and insurance each year.&#8217;
One of the advantages of investments in wine and whisky is that there is no need to pay capital gains tax on profits as they are classified as a &#8216;wasting asset&#8217; by HMRC.
&#8216;It’s also very fun,&#8217; Mr Peel commented. &#8216;It’s interesting to learn about the wines. You discover something new every day. I think it’s more engaging than investing in shares.&#8217;
Another investor is Cameron Scott, a 78-year-old accountant from Staffordshire who has been building up a portfolio of wines and is nearing retirement.
&#8216;My wine makes up between 5pc and 10pc of my overall portfolio,&#8217; he commented. &#8216;I like it because I can’t imagine that its value would ever fall to zero and it helps reduce currency risk. My best investment has been in an American wine that I bought seven or eight years ago, Screaming Eagle. It cost a few thousand a bottle, and its price doubled in just three years.&#8217;
&#8216;But overall I view it as a long-term investment. I don’t sell many, because I’d like to pass my wine down to my beneficiaries, rather than cash in now.&#8217;
Both Mr Peel and Mr Scott highlighted that they had found it hard finding a trustworthy broker in wine. &#8216;It is not a fully regulated market, so there are a lot of rogues out there,&#8217; said Mr Peel.
Keen to find out more about the benefits of wine investment? <a href="https://winecap.com/download-guide" target="_blank" rel="noopener">Download our free guide</a>.

WineCap Featured in The Telegraph

Rocketing inflation is no longer creeping toward us. It’s striding. Currently at 9% in the UK (jumping from 1.5% in April 2021)[1], inflation rates are set to hit a crisis point. And worried <a href="https://winecap.com/learn/investing-in-fine-wine-what-to-consider" target="_blank" rel="noopener">investors are understandably looking for solutions</a> to hedge their exposure.
Investing in wine is one of the most effective inflation hedges because of three main reasons:
• The performance of fine wine is uncorrelated to global markets 
• Fine wine is a scarce asset, becoming rarer over time 
• The growth of fine wine has been exceptionally stable, even more so than gold
In this article, we’ll explain the inflation-shielding qualities of fine wine as an investment.
<h2>The performance of fine wine is uncorrelated to global markets</h2>
For many investors, the bulk of their assets will be in marketable securities – publicly-traded stocks, bonds, or currencies. Famously, for generations, the rule of thumb has been to invest 60% in stocks and 40% in bonds. But this style of investing has a huge downside, which many are now coming to terms with. Even with diversification, entire asset sectors and classes are still affected by the same market turbulence.
Inflation is one such market shock. Even at a rate of just 3%, the entire value of cash will erode after just 24 years[2].
At the current rate of 9%, outpacing inflation will be an uphill struggle for investments in bonds and currency. <a href="https://winecap.com/learn/investing-in-wine-vs-investing-in-stocks-which-is-safer" target="_blank" rel="noopener">The stock markets – although slightly more resilient – will also feel the force of inflation</a>. As businesses grapple to remain competitive with soaring prices, stagnant wages, and less consumer spending, all sectors are likely to be affected in some way.
Fine wine investments, however, do not derive their value from the broader markets. And shocks like inflation have almost no effect on their worth. This is because the price of the fine wine is determined by a niche, insider group of passionate investors. As the supply and demand come from within, fine wine is almost entirely uncorrelated to the global markets. Interestingly, <a href="https://winecap.com/learn/q1-2022-report" target="_blank" rel="noopener">fine wine continues to grow in value despite market turbulence and soaring inflation levels</a>.
Other value drivers for fine wine include qualities that are personal to the bottle. For example, the brand of wine, the quality, and how it has been stored. None of these drivers have any direct link to the wider markets. While all of them give investors a lot more control over the value of their investment.
<h2>Fine wine is a scarce asset, becoming rarer over time</h2>
There are many ways to define value, but one of the most enduring is the scarcity of an asset. When there is less supply than demand, the value usually goes up. Fine wine is one of the purest examples of this.
Unlike other treasure assets such as gold or precious stones, fine wine naturally depletes over time as people drink it. Some bottles are so rare they are known as Unicorn Wines. One example is the legendary 1945 Domaine de la Romanée-Conti. The wine is famed for its iconic flavours and complexity. But the fact there are so few left in the world drives up the price exponentially. Only 600 were produced and there are almost none left today. In 2018, two such bottles were sold at auction for over $1 million[3], beating all records along the way. This bodes extremely well for long-term investors.
<h3><a href="https://winecap.com/news/ten-of-the-most-expensive-wines-in-the-world" target="_blank" rel="noopener">What are the most expensive wines in the world?</a></h3>
There is a clear trend showing how fine wines have increased in value over time. This is great for hedging against inflation. The Liv-ex index is one of the ways investors can track this steady increase. Since it began life in 2004, the fine wine market has grown in value by a staggering 315% (as of the end of 2021). Adjusting for inflation, the real value has grown by 125%. This is compelling growth, especially for those looking to outpace the 9% rates of inflation.
<h3><a href="https://winecap.com/news/why-the-2022-burgundy-vintage-is-looking-more-promising" target="_blank" rel="noopener">Which wine looks the most promising for 2022?</a></h3>
&nbsp;
<h2>The growth of fine wine is exceptionally stable, even more so than gold</h2>
Wine has been on a steady upward trajectory for some time now. In 2021, the collectible saw record gains and topped the Knight Frank Luxury Investment List. Some performed exceptionally well. Cases of Domaine Bizot, Vosne-Romanée, Aux Jachées, for example, soared by a whooping 414% over the past twelve months[4]. And an incredible 3,004% over five years[5].
By contrast, the worst-performing wine on our books – the Château Croizet-Bages 5eme Cru Classé, Pauillac – fell by just 23% over twelve months. And it’s already increasing in value, again. Over a five-year period, the brand has increased in value by an average of 29%.
<h3><a href="https://winecap.com/wine-track" target="_blank" rel="noopener">Discover the biggest risers and fallers this month</a></h3>
This illustrates the promising risk and return outlook for fine wines. Overwhelmingly, wine as an investment has shown growth.
In recent years, the strong performance of fine wine has even caused economists to question if the asset is more steady than gold. For centuries, gold has been considered an inflation hedge. Demand for this asset – and therefore value – has tended to spike during times of market turbulence. However, the flip side of this is that the precious metal can also tumble when the environment calms. Fine wine, to date, has not suffered this volatile fate. Investors in wine tend occasionally buy more during times of turbulence, as we saw in 2020. But there are no signs of mass sell-offs later. Arguably, this makes fine wine even more stable than rock-solid gold – an impressive feat!
<h2>How can you hedge against inflation with fine wine?</h2>
Shielding against inflation <a href="https://winecap.com/learn/seven-delicious-reasons-to-invest-in-fine-wine" target="_blank" rel="noopener">is just one of the many delicious benefits of investing in fine wine</a>. To name a few, fine wine investors benefit from tax perks, compelling growth potential and improved diversification. What’s more, they also support a much-loved industry, filled with passion. And, with fine wine investments, they can even <a href="https://winecap.com/learn/5-ways-fine-wine-investments-good-for-environment" target="_blank" rel="noopener">help to protect the environment</a>.
For the best results, experts recommend allocating a small proportion of your investments into treasure assets like wine.
Getting started is simple and hassle-free. For more information, contact us or explore our <a href="https://winecap.com/learn/fine-wine-investment-tips" target="_blank" rel="noopener">tips for investing in fine wine</a>.
[1] Source : <a href="https://ycharts.com/indicators/uk_inflation_rate" target="_blank" rel="noopener">Y Charts</a>
[2] Source : <a href="https://www.cnbc.com/2021/09/02/traditional-60/40-portfolio-has-actually-reached-its-expiration-date.html" target="_blank" rel="noopener">CNBC</a>
[3] Source : <a href="https://www.bloomberg.com/news/articles/2018-10-15/most-expensive-bottle-wine-1945-romanee-conti-burgundy-auction" target="_blank" rel="noopener">Bloomberg</a>
[4] Source : <a href="https://winecap.com/wine-track" target="_blank" rel="noopener">WineCap</a>
[5] Source : <a href="https://www.credit-suisse.com/media/assets/corporate/docs/about-us/media/media-release/2018/02/giry-summary-2018.pdf" target="_blank" rel="noopener">WineCap</a>
[6] Source : <a href="https://www.credit-suisse.com/media/assets/corporate/docs/about-us/media/media-release/2018/02/giry-summary-2018.pdf" target="_blank" rel="noopener">Credit Suisse</a>

Two men looking at a laptop drinking glass of wine

Is Fine Wine Inflation-Proof?

It’s English Wine Week and there’s now one more reason to raise a glass of Sussex sparkling wine. It has just been awarded Protected Designation of Origin (PDO) status from the Ministry for Farming, Fisheries and Food.
A product with a PDO means that it’s made in a particular way and comes from a specified region. It represents a guarantee to consumers that the product they’re buying is the real thing and prevents imitations.
Top wineries including Nyetimber, Bolney Estate and Rathfinny Estate all make wines in the region and will soon have another layer of protection in the form of the Sussex Sparkling Wine PDO that they can add to their bottles.  
Sussex currently has just under 50 wineries and – like many of the extraordinary English sparkling wines out there – has gained well-deserved international recognition. Its still wines are gaining momentum too. As the region gains accolades, awards and wineries, the only way is up and it continues to produce some of the finest sparkling wine in the world, giving top Champagne cuvées a run for their money.
Another element the Sussex PDO highlights is the difference in terroir in English winemaking by drawing a clear line between them and others made in Kent or Surrey.
Simon Thorpe, CEO of WineGB, commented on the new PDO: ‘The approval of a PDO for wines grown and made in Sussex comes at an important time for English and Welsh wines… There has never been more interest in and demand for our wines and the reputation they have gained in both domestic and international markets is based on high quality viticulture and winemaking excellence.’

Nyetimber vineyard with rows of vines in the sun

Sussex Sparkling Wine Secures PDO Status

The fine wine market has seen immense growth and <a href="https://winecap.com/learn/q1-2022-report" target="_blank" rel="noopener">broken numerous records</a> in the past year – here we outline four of the biggest wine investment trends to watch in 2022.
<h3>Bordeaux investment wines</h3>
Bordeaux remains the most important region for investable wines globally. It attracts the greatest liquidity, meaning that its wines, particularly the classified Growths, see consistent levels of trade. Bordeaux is a staple in <a href="https://winecap.com/learn/fine-wine-market" target="_blank" rel="noopener">most investment portfolios</a>, and the annual En Primeur campaign draws attention from collectors and trade year after year.
2022 sees the <a href="https://winecap.com/news/bordeaux-en-primeur-2021-initial-thoughts" target="_blank" rel="noopener">launch of the 2021 vintage</a>, which critics have largely claimed exceptional for dry and sweet white wines. Many of the new releases offer great value for money but there is also a plethora of exceptional older vintages like 2019 which are already enjoying serious price growth. A category to watch this year is the second wines of the First Growths, which benefit from the same technical expertise as the Grand Vin but represent a lower-priced alternative. These wines tend to deliver some of the biggest <a href="https://winecap.com/learn/wine-investment-market" target="_blank" rel="noopener">return on investment</a>.
<h3>Strong competition from Burgundy</h3>
On the global fine wine market, Burgundy has emerged as Bordeaux’s strongest competitor. For the first time in 2022, Burgundy has even taken a greater share of the UK fine wine market than Bordeaux. Demand is greater than ever but so are allocations.
Driven by scarcity, early investors in the sector have seen <a href="https://winecap.com/learn/burgundy-region-report" target="_blank" rel="noopener">increases of over 2,000%</a> in some wines. Over the past two decades, Burgundy’s leading index, which tracks the price performance of the 150 most sought-after wines, has risen over 740%. Today, the trend is to seek value – and stock – within Burgundy’s appellations, as the region continues to give investors reasons to want more.
<h3>Vintage Champagne </h3>
The start of the year was all about bubbles. Vintage Champagne led the charts in our <a href="https://winecap.com/learn/q1-2022-report" target="_blank" rel="noopener">Q1 wine market report</a> – a trend that is set to continue. Looming shortages due to the 2021 grape harvest, which was one of the smallest on record, have only increased global demand and pushed up prices. Consistent returns, stability, brand appeal and unparalleled distribution are just <a href="https://winecap.com/news/invest-in-champagne">few of the other reasons</a> why Champagne is very much in vogue in 2022.
<h3>The rise of other wine investment regions</h3>
The <a href="https://winecap.com/learn/fine-wine-investment-for-beginners" target="_blank" rel="noopener">ongoing broadening of the fine wine market</a> means that there are plenty of investment opportunities to discover outside the aforementioned French regions.
One such example is California. A string of good vintages in the past decade and high critic scores have elevated the region’s share of the fine wine market from just 0.1% to 7.6% over the past decade – a theme that is set to continue.
Italy is another success story. More Italian regions outside the pillars of Tuscany and Piedmont are delivering value and stable returns.
Want to discuss these wine investment trends in more detail with an expert? <a href="https://winecap.com/schedule-a-call" target="_blank" rel="noopener">Schedule a call with one of WineCap’s investment advisors.</a>

The Biggest Wine Investment Trends in 2022

We’re delighted to launch <a href="https://winecap.com/wine-track">Wine Track</a>, the most comprehensive index available. It enables you to identify the right, undervalued wines to buy and sell across the global market at the right time and price.
Our in-house technology collates and analyses Liv-ex and Wine-Searcher data, along with over 400,000 wine prices a day collected independently from 250 leading wine merchants across the globe, helping you navigate fine wine markets with confidence.
We’re proud to have also developed our own bespoke scoring system: the Wine Track critic score. It aggregates more than 100 wine critics’ scores from 12 worldwide publications to produce a simple and transparent score that marks each wine out of 100. This helps you reference a wine’s quality at a glance, as some critics use different scales to grade wines.
To demonstrate just how powerful Wine Track is, we’ve identified that Chateau de la Tour, Clos de Vougeot Grand Cru, Vieilles Vignes – at £1,794 per case – represents a real opportunity for retail investors to diversify their portfolio. This wine is from the same vineyard in Burgundy as Domaine Leroy, Clos de Vougeot Grand Cru – at £65,816 a case – and has an almost identical Wine Track critic score: 93.8 points compared to Domaine Leroy’s 94.7 points. While Domaine Leroy’s price is driven by its excellent reputation, Chateau de la Tour offers better value and accessibility.
Our tool monitors over 75,000 investment-grade wines from 1990 to the present day, enabling you to track how prices have changed over any given period.  
Wine Track is testament to the hard work of our development team and we’re proud to launch this free tool that harnesses the latest technology. Our data-led investment decisions are the reason our customers continue to experience positive returns.

Free Wine Investment Tool ‘Wine Track’ Launches

Le Clos Lanson is set to become the second Champagne ever to be sold on La Place de Bordeaux, one of the world’s oldest marketplaces. The single vineyard expression – and Champagne Lanson’s top cuvée – follows Champagne Philipponnat’s Clos des Goisses onto the historic marketplace.
La Place de Bordeaux is over 800 years old and is a distribution system that consists of around 300 négociants (distributors) and courtiers (middlemen) who buy and sell wines from Bordeaux châteaux. Historically, La Place only sold wines that were made in Bordeaux. However, in 1998 the marketplace opened its doors to its first non-Bordeaux bottling: Viña Almaviva’s 1996 vintage, a joint venture between Château Mouton-Rothschild and Chile’s Concha y Toro. In subsequent years, more and more non-Bordeaux wine producers have been invited to sell on La Place. Think Napa’s Opus One, Australia’s Penfolds Grange and Argentina’s Catena Zapata.
The advantage of selling wines on La Place is its access to global markets and experience selling into Asia, especially China. Négociants have salespeople around the world primed to sell high-end wines. Lanson’s president, François Van Aal, commented on this new approach:
‘This distribution method will enable our icon cuvée to reach a larger amount of wine lovers and collectors around the world, while strengthening the awareness of our Champagne house which is already present over 80 countries’.
Le Clos Lanson 2009 will be the first expression sold on the platform. This top cuvée is produced from 100% Chardonnay grapes harvested from a one-hectare, walled vineyard in the heart of Reims. Only just over 7,000 bottles, along with some magnums, were produced of the 2009 vintage.

Champagne Lanson to sell on La Place de Bordeaux

The wine investment market is characterised by its stability, increased diversity and high returns, which are particularly valued when traditional markets underdeliver.
Long considered a niche, the global fine wine market has considerably grown in size over the past two decades and has attracted <a href="https://winecap.com/learn/fine-wine-market" target="_blank" rel="noopener">more and more investors</a>. This, in turn, has contributed to greater price transparency (making it easier to discover the price of a wine) and market liquidity (making it easier to sell it), which have <a href="https://winecap.com/learn/fine-wine-investment-for-beginners" target="_blank" rel="noopener">facilitated the trade</a> of fine wine. The more wines that have been in demand, the more prices have risen, creating something of a virtuous circle.
But the fine wine market is not without its intricacies. Below we examine the importance of market data, the returns you can expect from wine investment and the reasons why the market is growing.
<h3>What is the ROI on wine?</h3>
Fine wine prices are <a href="https://winecap.com/learn/q1-2022-report" target="_blank" rel="noopener">currently at record levels</a> so there is arguably no better time to be involved in the wine investment market. The globally recognised Liv-ex Fine Wine 100 index, which monitors the price movement of the 100 most sought-after fine wines in the world, has risen 307% over the past two decades. The broader Liv-ex 1000 index, which tracks 1,000 wines from around the world, has seen even greater returns: 361% since its conception in 2003.
Individual wines have risen by <a href="https://winecap.com/learn/fine-wine-investment-for-beginners" target="_blank" rel="noopener">different amounts</a>, like the First Growth Château Mouton Rothschild 2000, which has appreciated over 800% in value since release, or Domaine de La Romanée-Conti Romanée-Conti Grand Cru 2010 – up by over 1,000%. Such rare fine wines impress with their stellar performances, but there are other more widely available alternatives that can deliver your desired return on investment (ROI). There are currently over 12,000 different wines that can be considered investment worthy.
While ROI is dependent on the wines you choose to invest in, there are additional factors such as provenance, <a href="https://winecap.com/learn/investing-in-fine-wine-what-to-consider" target="_blank" rel="noopener">storage</a> and the time of buying and selling that will affect your profits. Reliable market data can help you make informed investment decisions.
<h3>Is wine a risky investment?</h3>
Wine is a <a href="https://winecap.com/learn/what-are-the-benefits-of-investing-in-fine-wine" target="_blank" rel="noopener">low-risk investment</a>. Physical assets like fine wine are stable sources of value in times of uncertainty. While stock markets can crash and share prices can collapse overnight, tangible assets do not cease to exist. As a <a href="https://winecap.com/learn/fine-wine-market" target="_blank" rel="noopener">low-volatile investment</a>, fine wine delivers stability and consistent returns. It is a proven way to <a href="https://winecap.com/learn/fine-wine-taxation-2022" target="_blank" rel="noopener">strengthen and diversify an investment portfolio</a>. Additionally, wine is not reliant on a single economy and it can be traded internationally.
Fine wine also tends to perform well in <a href="https://winecap.com/learn/seven-delicious-reasons-to-invest-in-fine-wine" target="_blank" rel="noopener">inflationary environments</a> due to its inherent tangibility and scarcity. It is a combination of investment and luxury good, which benefit from rising global wealth.
<h3>Is wine a good investment? </h3>
Fine wine has a proven track record as an investment. A quick look into the <a href="https://winecap.com/learn/q1-2022-report" target="_blank" rel="noopener">history of the fine wine market</a> shows how it has delivered stability and returns during the 2008 financial crisis, Brexit, the Covid-19 pandemic and other global events that have shaken equities.
As a passion investment, fine wine benefits from global demand. Wine is, after all, one of the oldest beverages in the world and its appeal has never waned. Its inherent value only adds to the strength of the fine wine investment market.
Interested in speaking to one of WineCap&#8217;s <a href="https://winecap.com/schedule-a-call" target="_blank" rel="noopener">investment experts</a>, now you know the wine investment market’s fundamentals?

The Wine Investment Market: What You Need to Know

When it comes to fine wine investments, the environment probably isn’t the first thing that crosses people’s minds. We&#8217;ve taken a closer look at why, we believe, it should be reconsidered as an Environmental, Social and Governance (ESG) or Socially Responsible investment.
With ESG, alcohol is usually one of the first asset classes to get screened out[1]. Interestingly, this could stem from the Quaker movement, who first started the trend of ethical investing about three hundred years before it became mainstream[2]. This famously teetotal religion encouraged investing, but only if it toed the holy line. In the late twentieth century, other investments came under fire too, especially those which profit from war. Today, it’s generally accepted that investments in alcohol, pornography, gambling, and weaponry cannot be “ESG”[3].
But is this approach a little sour? Especially when you can find the likes of British American Tobacco, McDonalds, Coca-Cola, PepsiCo, British Petroleum, Phillip Morris, ExxonMobil and more featured on popular ESG funds[4]? How could fine wine possibly be worse for the environment than junk food or oil companies? And is it time to reset the dial and realise the true environmental potential of this asset?
Here are five sobering reasons why fine wine should be reconsidered as an ESG investment: 
<h2>1. Vineyards are a carbon sink</h2>
A rugby-pitched-sized area of vineyard soaks up a respectable 2.84 tonnes of carbon every year[5]. For context, three of these plots would balance out what the average Brit emits annually[6]. Unlike most other ESG investments today, this off-setting is a natural and intrinsic part of the business model of wine-making. It’s not an &#8216;extra&#8217;. This is no ESG stunt or short-term project.
Supporting the healthy growth of plants is essential to the production of winemaking. There are precious few investments which literally grow on trees and soak up carbon as part of their day-to-day functioning.
<h2>2.   Soil quality can be enhanced through fine wine</h2>
What’s more, vineyard managers who mulch or compost their old or unused vines (rather than burn them) can save an additional 4.5 tonnes of carbon[7]. As well as helping to mitigate climate change, this also raises the quality of the soil, which is great news for local ecosystems too.
Soil degradation is hot on the radar for concerned environmentalists. Around a third of the planet’s land is damaged from intensive farming[8]. And, alarmingly, fertile soil is being lost at a rate of 24 billion tonnes a year[9]. Sustainable vineyards provide a welcome respite against this concerning environmental damage.
<h2>3.   Organic wine production supports pollinators</h2>
Vineyards can also offer welcome sources of nectar for pollinators, like bees. These tiny creatures are vital for our planet and well-being. It’s estimated that one third of all our food is thanks to the humble pollinator moving from plant to plant and spreading seeds along the way[10]. Sadly, over the past decades, irresponsible agriculture, overzealous pesticides, and the loss of wild meadows have seen these essential creatures fall into steep decline.
Organic or pesticide-free vineyards – often one of the hallmarks of fine wine – helps bees and other pollinators get back on track. Small flowers bud around the vines as by-products, and split grapes provide rewarding sweet juice for the hungry invertebrates. Some wineries are now planting more native shrubs around vineyards to further support pollinators[11].
<h2>4.   Fine wine fights back against single-use plastic</h2>
Plastic is fast becoming a dirty word – and especially single-use plastic. Even 400 years after it&#8217;s thrown away, this packaging will not have biologically degraded[12]. As activists and environmentalists call for an end to this era, fine wine could help carve out a new way forward. Unlike disposable plastic, fine wine glass bottles are something to be treasured.
What’s more, glass has a much higher recycling rate than plastic alternatives, and unlike plastic it can be 100% recycled.[13] Although glass is by no means a perfect solution, it seems to be a better way forward than many other “ESG” junk food, soft drink or oil companies are offering. Fascinatingly, some wineries are even experimenting with light-weight glass and even cardboard bottles as we type[14]. Watch this space!
<h2>5.   Vineyards help fill rocky terrain and hills with plants</h2>
As anyone who spent a youthful summer picking grapes will be able to tell you, it was more of a work-out than expected! This is because the knee-high vines are usually grown on steep sunny hills and even over rocky terrain.
While this may be strenuous on the hamstrings, it’s great for using up space wisely. Vineyards often voyage up mountains and valleys to face the sun. This helps to fill up otherwise unsuitable stretches of hillside with plants and flowers.
The higher altitude also acts as a natural pesticide, making it much easier to create organic wines. What’s more, these vineyards are also less likely to catch and spread grape diseases[15], adding yet another environmental benefit to the investment.
<h2>… Is it finally time to consider fine wine as a sustainable investment?</h2>
As assets go, wine is one of the least carbon-intensive. As WeForum recently pointed out[16], you’d have to drink a bottle of wine every single day for three years for it to have the same impact as a single London to New York flight.
The fundamental business of creating wine is so intrinsically sustainable that most of its emissions come from just the packaging [17] and tourism[18]. And winemakers are keen to cut these down! Every day, we’re seeing more and more environmental initiatives coming from the industry. From renewable energy to sustainable wine tours, there’s a vast range of bright and brilliant programmes coming into the mainstream.
So, is it time to start considering fine wine as a viable environmental investment? We believe so.
If you’d like to learn more about the fascinating world of wine investments, <a href="https://winecap.com/download-guide" target="_blank" rel="noopener">download our complimentary guide</a>.
&nbsp;
[1] Source : <a href="https://www.unpri.org/an-introduction-to-responsible-investment/an-introduction-to-responsible-investment-screening/5834.article" target="_blank" rel="noopener">UN PRI</a>
[2] Source : <a href="http://www.the-ethical-partnership.co.uk/historyofethicalinvestment.htm" target="_blank" rel="noopener">The Ethical Partnership</a>
[3] Source : <a href="https://www.unpri.org/an-introduction-to-responsible-investment/an-introduction-to-responsible-investment-screening/5834.article" target="_blank" rel="noopener">UN PRI</a>
[4] Source : <a href="https://www.hdinvestmentcontent.com/post/5-vice-fund-companies-in-esg-investments" target="_blank" rel="noopener">HD Investment Content</a>
[5] Source : <a href="https://www.winegb.co.uk/home-visitors/sustainable-winegb/carbon-calculator/" target="_blank" rel="noopener">Wine GB</a>
[6] Source : <a href="https://www.winegb.co.uk/home-visitors/sustainable-winegb/carbon-calculator/" target="_blank" rel="noopener">Wine GB</a>
[7] Source : <a href="https://www.winegb.co.uk/home-visitors/sustainable-winegb/carbon-calculator/" target="_blank" rel="noopener">Wine GB</a>
[8] Source : <a href="https://news.un.org/en/story/2019/06/1040561" target="_blank" rel="noopener">United Nations</a>
[9] Source : <a href="https://news.un.org/en/story/2019/06/1040561" target="_blank" rel="noopener">United Nations</a>
[10] Source : <a href="https://ourworldindata.org/pollinator-dependence#:~:text=When%20we%20calculate%20how%20much,35%25)%20relies%20on%20pollinators." target="_blank" rel="noopener">Our World in Data</a>
[11] Source : <a href="https://www.forbes.com/sites/lizthach/2021/09/08/how-napa-and-sonoma-vineyards-are-going-beyond-sustainability-to-embrace-climate-positive-goals/?sh=da607e376521" target="_blank" rel="noopener">Forbes</a>
[12] Source : <a href="https://www.nationalgeographic.com/science/article/plastic-produced-recycling-waste-ocean-trash-debris-environment#:~:text=Plastic%20takes%20more%20than%20400,12%20percent%20has%20been%20incinerated." target="_blank" rel="noopener">National Geographic</a>
[13] Source : <a href="https://www.sustainablejungle.com/sustainable-living/glass-vs-plastic/" target="_blank" rel="noopener">Sustainable Jungle</a>
[14] Source : <a href="https://www.winemag.com/2020/07/27/paper-beer-bottles-wine-sustainble/" target="_blank" rel="noopener">Beverage Industry Enthusiast</a>
[15] Source : <a href="https://www.olivemagazine.com/drink/high-altitude-wine-guide/" target="_blank" rel="noopener">Olive Magazine</a>
[16] Source : <a href="https://www.weforum.org/agenda/2021/07/what-can-the-wine-industry-teach-us-about-sustainability/" target="_blank" rel="noopener">We Forum</a>
[17] Source : <a href="https://www.upmraflatac.com/news-and-stories/articles/2021/08/reducing-the-carbon-footprint-of-wine--from-vineyards-to-packaging/" target="_blank" rel="noopener">UPMRAFLATAC</a>
[18] Source : <a href="https://theconversation.com/vineyard-tourism-is-a-big-source-of-carbon-emissions-want-to-help-then-buy-more-wine-164600" target="_blank" rel="noopener">The Conversation</a>

5 Ways Fine Wine Investments are Good for the Environment

Château La Gaffelière has announced that it has decided to leave the Saint-Émilion classification. That now makes it the fourth Premier Grand Cru Classé to withdraw from it.
The Malet-Roquefort family has owned the estate for over 300 years and released a statement which detailed the reasons for its departure. The château no longer recognises ‘the values in the criteria for evaluating the great terroirs and fine wines of Saint-Émilion as set out by the Classification Committee’.
The château cited the committee’s first report which it said ‘called into question the quality level of our terroir, which has been acclaimed and distinguished by the AOC authorities for more than 65 years’. The Malet-Roqueforts argue that the scoring system put in place for the tasting, ‘contradicts all the scores that Château La Gaffelière has obtained over many years from the greatest wine professionals’.
The classification is updated every 10 years and in 2012 it awarded Premier Grand Cru Classé A status to Châteaux Angélus, Ausone, Cheval Blanc and Pavie. Only Pavie currently remains. Angélus said that the classification had become a ‘vehicle for antagonism and instability’. 
Châteaux Ausone and Cheval Blanc withdrew from the classification last year as they found that there had been ‘a profound change in its philosophy’ in 2012. They believe that there was now ‘too much of a focus on marketing drift such as the importance of product placement, how often an estate appears in media, including PR and in social media, along with wine tourism infrastructure’. 
Defending the classification’s process, the Saint-Émilion wine council said that the new ranking system is ‘a formidable tool for challenge, innovation and modernity’.

Château La Gaffelière to Leave the Saint-Émilion Classification

Frosts descended on some of France’s key fine wine regions in April for the second year in a row. Producers in Burgundy, Bordeaux and Champagne braced themselves for the coldest temperatures the country had experienced since April 1947. Burgundian winemakers were perhaps the most hypervigilant out of all the country’s producers who were taking measures in the vineyard to prevent the frost from settling. Burgundy’s vignerons were poised to battle the elements each night in the hope of escaping the same losses that impacted the 2021 vintage.       
Fortunately, the Bureau Interprofessionnel des Vins de Bourgogne (BIVB) – Burgundy’s wine board – has just announced that this year’s frost damage isn’t as bad as first thought. While ‘everyone had feared the worst’, due to a mild winter and two snaps of frost in April, it commented that ‘this event is different’ to last year’s. ‘The vines are less advanced in the growth cycle and in general terms, the frost was shorter and less intense.’ The areas which came under the most pressure from frost were ‘certain sectors in the northern part of the region.’
The BIVB’s technicians found in their analysis of vineyard plots that early May’s warmth and rainfall had helped accelerate the growing season and that flowering had begun mid May.  
While the climatic challenges experienced this year hadn’t resulted in as much damage in Burgundy’s vineyards as previously feared, the BIVB warned last month that there are still potential difficulties that lie ahead. This stems from a combination of increased global demand from consumers and reduced yields in 2021. Another factor the wine board highlighted was the financial pressure winemakers were under, having had to pay for additional vineyard equipment, such as candles, to ward off the frost. 
With frosts becoming more and more of a yearly occurrence and with producers’ margins becoming even tighter, could we see already high Burgundy prices rise even more? WineCap will be keeping a close eye on the 2022 Burgundy vintage and its progress. 
October 2022 update: Now that the harvest is in, discover the BIVB&#8217;s initial thoughts on the quality of the vintage and yields <a href="https://winecap.com/news/the-2022-burgundy-wines-real-potential" target="_blank" rel="noopener">in our article</a>.
Want to learn more about Burgundy, its producers and appellations? Download our <a href="https://winecap.com/learn/burgundy-region-report" target="_blank" rel="noopener">Region Report</a> to find out more.

Why the 2022 Burgundy Vintage is Looking Promising

If you&#8217;re considering fine wine investment, here are some tips to help you get started.
<h3>How to get the right information?</h3>
It is important to do your own research and stay up-to-date on fine wine investment trends but where do you get started?
Looking into wine types, growing regions and brands is a useful first step. Researching average prices for the <a href="https://winecap.com/learn/investing-in-fine-wine-what-to-consider" target="_blank" rel="noopener">wines you want</a> will help you make sure you are being quoted a reasonable price when you come to buy them. Nowadays there is a wealth of pricing data online for investors to navigate.
Meanwhile, regional fine wine investment reports and vintage overviews can help you understand the fine wine market in more depth. <a href="https://winecap.com/learn" target="_blank" rel="noopener">WineCap’s Academy</a> provides a resource on producers and their wines so your knowledge grows, as your portfolio does. News websites like The Drinks Business, Decanter, Bloomberg, and the Financial Times, regularly cover topics related to fine wine investment. Critical coverage can also help you navigate the world of fine wine and inform your investment decisions.
Regularly researching the fine wine market and identifying emerging trends will help you find the best investment opportunities available.
<h3>Should I use a wine investment company?</h3>
Wine investment companies have years of experience dealing with the fine wine market and its intricacies. Relying on the latest digital innovations, wine investment experts can share their unbiased knowledge with you and advise you on the best wine investments. WineCap’s unique proprietary technology analyses over 400,000 wine prices a day to identify buying and selling opportunities across the global market.
Working with a reputable fine wine investment company helps you get the wines that you want. WineCap has <a href="https://winecap.com/learn/your-wine-investment-questions-answered" target="_blank" rel="noopener">access to the top investible allocations</a> and an extensive portfolio of wines stored in secure government bonds.
While it is possible to conduct your own research, find your own storage and buy your selected wines, investing in fine wine through a trusted specialised company saves you time and money.
<h3>Looking for a wine investment guide? </h3>
Our <a href="https://winecap.com/learn/fine-wine-investment-for-beginners" target="_blank" rel="noopener">Fine Wine Investment for Beginners guide</a> can help you get started. The guide provides an overview of the fine wine investment market and how it works in practice. It also outlines the wine investment process in four simple steps.
Get started now you&#8217;ve discovered these top fine wine investment tips. <a href="https://winecap.com/schedule-a-call" target="_blank" rel="noopener">Speak to one of WineCap’s advisors</a> to find out more about next steps.

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Fine Wine Investment Tips

WineCap featured on <a href="https://www.yourmoney.com/investing/blog-why-fine-wine-might-be-a-better-investment-than-you-thought/" target="_blank" rel="noopener">YourMoney.com</a> today in an article that focused on how fine wine is gaining an increasing amount of investor attention in a climate of rising inflation and market volatility. You can read a summary below:
In the current climate of war, instability and rising inflation, alternative asset classes such as fine wine, are in the spotlight for investors.
A lot of asset classes have been materially hit by factors including the war in Ukraine and issues arising from Covid-19 including record inflation.
High inflation creates a big problem for some investors. Price increases reached 9.2% in the UK in March, hitting a 30-year high and that rate is predicted to continue to grow over the rest of the year.
Economies in Europe and North America are also experiencing these kind of pressures. Central banks have begun increasing base rates and further rises aren&#8217;t ruled out later in 2022.
With uncertainty in the markets, lots of investors are looking to diversify their portfolios and reduce risk.
Alternative asset classes are attracting a lot of attention and investment-grade wines are exhibiting capital strength. The fine wine market is fostering a stable environment, even during periods of economic uncertainty.
The high end of the fine wine market is self-contained and not linked to financial markets. This is due to the fact that it shadows the movement of wealth around the globe. It has low volatility when compared to conventional markets and other ‘luxury’ asset classes.
The past 25-30 years has seen investment-grade wines grow in popularity due to their finite production levels, flexibility and stability.
It also has a proven track record of resisting inflation. The main fine wine 1000 index – from its launch to the end of 2021 – has gone up 270.7%, survived three global financial crises and delivered more returns than the S&amp;P500.
Interestingly, in the current economic climate, as inflation spiked towards the end of 2021, the price of fine wine did too and the 1000 index rose over 19% last year.
Fine wine is generally viewed as way to store value. In the past few years, wine has performed better than gold. In 2021, wine returned 22.5% while gold returned -2.69%.
The market has grown in recent years with more investment from both sophisticated and retail investors; this has generated more demand for limited physical cases of wine. This demand is continuing to grow. For the world&#8217;s most sought-after wines demand always outstrips supply.
Companies are democratising wine investment, something that historically was only for high net worth individuals and sophisticated investors.
Retail investors can now take advantage of lower fee models and harness cutting edge technology to benefit from fine wine’s diversifying powers in a currently uncertain and unstable environment.
WineCap is a new wine investment company which analyses over 400,000 wine prices a day to identify the right, undervalued wines to buy and sell across the globe.

Why Fine Wine Might be a Better Investment Than You Thought

In this article, we outline the key things that you need to consider when investing in fine wine. Fine wine investment experts like the team at <a href="https://winecap.com/learn/your-wine-investment-questions-answered" target="_blank" rel="noopener">WineCap</a> can help you make informed decisions relating to the following factors.
<h3>Is investing in fine wine a good idea?</h3>
Investing in fine wine is <a href="https://winecap.com/learn/fine-wine-taxation-2022" target="_blank" rel="noopener">a proven way</a> to strengthen and diversify your portfolio. Fine wine is a stable, low-risk investment thanks to its tangibility and low volatility. As an alternative asset, fine wine has shown very little correlation to mainstream markets. When traditional investments like bonds and equities fall, fine wine tends to hold steady. Moreover, fine wine has been one of the best-performing assets over the last 30 years, delivering consistent returns even in times of uncertainty.
<h3>How much should you invest in wine?</h3>
Fine wines are a luxury commodity, which means they can sometimes command high prices. <a href="https://winecap.com/learn/your-wine-investment-questions-answered" target="_blank" rel="noopener">Most people</a> tend to start off in the vicinity of £5,000-£10,000 to make their investments worthwhile. However, there are <a href="https://winecap.com/learn/fine-wine-investment-for-beginners" target="_blank" rel="noopener">a range of options</a> depending on the region and the producer, how much of the wine is made and the wines’ age. Setting your budget before you start will help you narrow your focus and ensure you have exposure to the wines that suit your investment goals. This figure may change as time goes on, but it’s good to have a starting point.
<h3>Which wines should you invest in?</h3>
Once you have set your budget and determined your investment goals, you need to decide which wines you want. Factors such as region, producer, grape variety and critical acclaim will affect their final value.
A wine investment expert will help you find the appropriate wines for your investment portfolio. <a href="https://winecap.com/about-us" target="_blank" rel="noopener">WineCap</a> has formed long-lasting relationships over the past decade with négociants, wholesalers and private collectors. This means that we have access to some of the world’s most prized wines. What’s more, our unique proprietary technology analyses over 400,000 wine prices a day to identify the right, undervalued wines to buy and sell across the global market at the right time and price.
<h3>How will you store your wines?</h3>
Investment-grade wine should be stored correctly to help protect its value. For long-term storage, this means holding the wine in a cool, dark place with minimal disturbance. Bonded storage (a secure location approved by the HMRC that stores items that haven’t paid VAT or duty tax) will give you the peace of mind that your wine is being kept in the right conditions. World-class care ensures that when you come to sell, your wine’s provenance will quickly secure maximum prices.
Ready to embark on your wine investment journey? <a href="https://winecap.com/schedule-a-call" target="_blank" rel="noopener">Schedule your free consultation with one of WineCap’s investment experts</a> to find out the next steps.

Investing in Fine Wine: What do You Need to Consider?

Penfolds is Treasury Wine Estates’ most iconic brand. Its most sought-after bottling is undoubtedly ‘Grange’ which is revered by wine lovers and collectors the world over and has received a wealth of 100 point scores, rave reviews and awards since its first official vintage in 1960.
China is an important market for Treasury Wine Estates and its Penfolds wines are in high demand. However, due to the eye-wateringly high tariffs (up to 200%) that were imposed by Beijing in <a href="https://www.smh.com.au/politics/federal/pm-warns-of-economic-challenges-ahead-as-china-wine-tariffs-hit-20201128-p56irn.html" target="_blank" rel="noopener">November 2020</a>, its exports to the country are down by 26%. 
In order to supply its wines to China as smoothly as possible in future, Treasury Wine Estates has found a way to bypass the tariffs: by growing grapes and making wines domestically to create ‘Penfolds China’. The international drinks company has been experimenting with viticulture in the western province of Yunnan in the Ningxia and Shangri-la regions and is happy with the results of its ‘primarily Cabernet-based’ wines so far, as Chief Executive Officer Tim Ford commented: ‘China is an emerging fine winemaking region and we’re confident we can produce a premium Chinese Penfolds that maintains the distinctive Penfolds house style and uncompromising quality’.
Penfolds is expected to release this new wine in the second half of 2022 and each bottle will reach between A$30 &#8211; A$50, as reported by <a href="https://www.bloomberg.com/news/articles/2022-05-18/made-in-china-penfolds-wine-will-dodge-crippling-import-tariffs">Bloomberg</a>.
This isn’t the first time that Penfolds has looked to foreign shores in order to push winemaking boundaries. It launched Penfolds California last year, with a series of wines made in Napa from Cabernet Sauvignon and Shiraz. ‘Quantum’, its top cuvée, was released at £545, 10% higher than Grange in the UK. Interestingly, its parent company has also acquired vineyard holdings in Champagne and Bordeaux.
All eyes are sure to be on China, Champagne and Bordeaux over the coming months and years as the fine wine world waits to see which other innovative and ground-breaking wines Penfolds releases from both established and emerging wine regions.

Penfolds to Produce Special Made-in-China Bottling

Fine wine has numerous investment benefits that distinguish it from other assets. More than just a passion investment, fine wine provides stability and substantial financial returns. Below we examine seven of the reasons <a href="https://winecap.com/learn/fine-wine-investment-for-beginners" target="_blank" rel="noopener">why fine wine makes a good investment</a>.
<h3>High-performing asset</h3>
Fine wine has been one of the best-performing assets over the last 30 years, meaning that its value has been increasing over time. The compound annual growth rate since January 1988 has been 12.6%. During the Covid-19 pandemic, leading fine wine indices registered double-digit increases in contrast to the extreme volatility experienced in financial markets. 2021 was a record-breaking year for the fine wine market, which outperformed mainstream equities. In the past year, the broadest measure of fine wine prices, the Liv-ex 1000 index, has risen 24.6% versus 4.2% for the FTSE100, and declines of 2% for the S&amp;P500 and 11.7% for the tech-heavy Nasdaq index.
<h3>Tangibility</h3>
Wine is a tangible physical asset, which only adds to its allure. While stock markets can crash and share prices can collapse overnight, tangible assets do not cease to exist (unless, in this case, they are drunk and enjoyed). Fine wine can be compared to real estate but without the high maintenance costs and without being reliant on a single economy. It can also be traded internationally.
<h3>A stable, low-risk investment</h3>
Physical assets are stable sources of value in uncertain times. Fine wine is an effective hedge against inflation and recession. Its performance has proved that it can successfully weather rising prices and economic downturns. As a <a href="https://winecap.com/learn/fine-wine-market" target="_blank" rel="noopener">low-volatile investment</a>, fine wine delivers stability and consistent returns.
<h3>Finite supply and rising demand</h3>
Investment-grade wines are finite as they are both physical goods and vintage products. Supply is limited due to the strict conditions under which they are produced and as the wines enter their drinking windows and are consumed. This, plus rising demand from a growing global market and new wealth from emerging economies guarantees stable price appreciation over time – a phenomenon relatively unique to fine wine.
<h3>Portfolio diversifier</h3>
As an alternative asset, fine wine has shown very little correlation to mainstream markets. When <a href="https://winecap.com/learn/investing-in-wine-vs-investing-in-stocks-which-is-safer">traditional markets</a> fall, fine wine tends to hold steady. This makes it a popular alternative to more traditional investments, such as bonds and stocks. As a portfolio diversifier, fine wine reduces the overall risk of an investor’s portfolio, protecting wealth and providing returns.
<h3>Tax exemption</h3>
Fine wine is a tax efficient investment. As a ‘wasting’ asset – an item with a life span of no more than 50 years – most fine wine is exempt from Capital Gains Tax when it is sold. Although wine can be drinkable some 60 years later, most wine sales would not give rise to a potential tax liability, meaning that investors can enjoy more significant returns.
<h3>Passion investment</h3>
Last but not least, fine wine is a passion for many investors. There is a growing trend for people who profit from what they might consider their hobby. Buy, sell or drink, fine wine allows you to simultaneously grow your passion and profits.
Ready to get started now you know more about investing in wine? <a href="https://winecap.com/schedule-a-call" target="_blank" rel="noopener">Speak to one of WineCap’s investment experts</a> to discover the next steps on your wine journey.

What are the Benefits of Investing in Fine Wine?

As alternative assets go, fine wine is one of the most vibrant and exciting on the market. Not only does it add depth and passion to an investment portfolio, but it can deliver extraordinary returns too. Experts recommend allocating between 1 – 2% of an overall portfolio to this intriguing asset class<a href="#_ftn1" name="_ftnref1">[1]</a>. And among the super wealthy high net worth individuals, the proportion is anticipated to be even higher<a href="#_ftn2" name="_ftnref2">[2]</a>.
Here are seven compelling benefits to consider investing in fine wine:
<h2>1.   Impressive potential for returns</h2>
Investors should always remember that there are no guarantees, and historical returns do not mean future ones. But it’s hard to ignore the impressive and steady performance of the fine wine markets.
Overall, the fine wine market has enjoyed a compound annual growth rate (CAGR) of 12.6% since 1988<a href="#_ftn1" name="_ftnref1">[3]</a>. Another report by Knight Frank that fine wines had increased in value by a staggering 127% over the past decade<a href="#_ftn2" name="_ftnref2">[4]</a>. And it’s showing no signs of slowing. Already within the first months of 2022, fine wines outperformed all other major markets, except commodities<a href="#_ftn3" name="_ftnref3">[5]</a>. What’s more, experts are optimistic for the future. Burgundy wines and <a href="https://winecap.com/news/the-champagne-brands-driving-price-growth" target="_blank" rel="noopener">Champagne have particularly flourished over recent months</a>. And – as adverse weather and climate change impacts the creation of new wine<a href="#_ftn4" name="_ftnref4">[6]</a> &#8211; these vintages are likely to become ever more sought-after.
<h2>2.   Powerful inflation-beating properties</h2>
Today’s market is overheating. And as central banks frantically increase interest rates in a bid to slow down inflation, it shows no sign of cooling. In May 2022, the Bank of England warned Britain to brace itself for inflation levels to rise above 10% &#8211; the highest since 1988<a href="#_ftn1" name="_ftnref1">[7]</a>. This leaves traditional stocks and bonds investors feeling nauseous. The markets are staggering, with cash and debt instruments on the edge of plummeting.
Meanwhile, those assets such as gold, art or fine wines which have inflation-beating properties are in demand. This could make it an excellent choice for concerned investors.
<h2>3.   An exceptional diversifier</h2>
Nobel Prize laureate, economist Harry Markowitz famously quipped that diversification is the only “free lunch” in investing<a href="#_ftn1" name="_ftnref1">[8]</a>. This is the process of spreading wealth across many different investments to take advantage of market opportunities while shielding against turbulence. Diversification doesn’t just mean investing in different asset types, sectors, or geographical locations though. Crucially, it also means investing in assets with different income sources and value drivers. Or to put it another way, the value of some assets should be uncorrelated to the stock market.
This is often a stumbling block for investors. How can you invest in an asset that’s uncorrelated or even negatively correlated to the stock market? Whether it’s tech companies in the US, or renewable energy plants in Europe, most assets are all impacted by the same market events. However, fine wine is different. The value of fine wine is determined by a completely unrelated set of criteria to publicly-traded stocks or bonds.
Some of these value-drivers are unique to the bottle. The wine-making technique, region, weather, year, packaging, storage, age and more all play a part. While the supply and demand factors are generally kept within a niche and exclusive circle of connoisseurs. This makes fine wine a truly exciting diversifier, akin to art. During the 2020 pandemic and recession, for example, the value of fine wines increased by a whopping 13%<a href="#_ftn2" name="_ftnref2">[9]</a>. This highlights a powerful negative correlation to the wider market performance.
For forward-thinking investors, fine wine could just be the strategic hedge against market volatility they’ve been looking for.
<h2>4.   A refreshingly tangible investment</h2>
In a world filled with bitcoin, the metaverse and crypto-assets, an investment you can touch is a breath of fresh air. Physical assets like gold, property, or fine wines can feel extremely reassuring during periods of market turbulence – which becomes reflected in their value.
Tangibility is one of the most significant benefits and differentiators of fine wine as an asset. While the costs of storage and insurance can eat into returns, it’s a small price to pay for the durability of the asset. After all, companies can collapse, rendering their shares and stock options useless. Inflation can eat away at cash or debt. And companies or governments can default on their loans, and file for bankruptcy. Electronic shares are only real if they exist on a screen.
But, regardless of the economy outside, a premium bottle of fine wine still be there. It will still be a desirable and solid asset which becomes better and rarer over time.
<h2>5.   Fine wine is exempt from Capital Gains Tax</h2>
Fine wine falls into a curious tax bracket. As it is deemed by the HMRC to have a useful economic life of 50 years or less, it’s known as a “wasting chattel” or a “wasting asset”. While this may not sound flattering to the purveyors of fine wines, this unsightly name is really a blessing for investors. It means returns from these assets are free from costly Capital Gains Tax (CGT) &#8211; currently set at 20% for all annual income after £12,300.<a href="#_ftn1" name="_ftnref1">[10]</a> This is a major benefit of fine wines and can seriously boost returns for investors.
If the wine is considered to have a life of more than 50 years, some CGT may apply, but it’s still somewhat shielded from the full hit. Tax is payable only for returns of more than £6,000. This is a significant perk for investors which could more than compensate for storage and insurance costs. <a href="https://winecap.com/learn/fine-wine-taxation-2022" target="_blank" rel="noopener">Find out more about fine wine taxation.</a>
<h2>6.   More room for price negotiation</h2>
More than one million trades<a href="#_ftn1" name="_ftnref1">[11]</a> are made on the London Stock Exchange every single day. With so many people jostling to buy and sell shares, this makes the public investment markets extremely efficient. Whatever price a stock has at any moment of time is probably exactly what it’s worth, according to thousands of investors. Because of this, it’s almost impossible to get a bargain in the short-term. Instead, investors need to buy at a pre-determined price and wait until the asset appreciates or depreciates.
With fine wine, the process of buying and selling is completely different. And unless, you’re investing with an index fund or something similar, you’ll likely find yourself at exclusive auction houses or negotiating a sale privately. Just like buying a property or bidding online, this opens the possibility of getting a better price than you expected.
<h2>7.   Support a much-loved industry</h2>
It’s no coincidence that fine wines are known as “passion assets”. Investors who want to do more than simply generate financial returns often turn to this unique world because of its vibrant industry and exclusive inner-circle.
Being part of this group of investors means supporting a sector steeped in history and culture. It means putting value on true quality and appreciating some of the finest craftsmanship in the world. It is the only asset class that you can sip and savour, bringing exquisite flavours and exceptional taste to your portfolio.
<h2>Interested to learn more …?</h2>
Incorporating fine wine into a diversified investment portfolio could be a tasteful way to; boost returns, enhance diversification, shield against inflation, benefit from tax perks and even support an industry steeped in culture. If you’d like to learn more about the fascinating world of wine investments, <a href="https://winecap.com/download-guide" target="_blank" rel="noopener">download our complimentary guide.</a>
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<a href="#_ftnref1" name="_ftn1">[1]</a> Source : <a href="https://www.honestgrapes.co.uk/news-events/could-capital-gains-tax-exemption-on-fine-wine-get-the-axe/" target="_blank" rel="noopener">Honest Grapes</a>
<a href="#_ftnref2" name="_ftn2">[2]</a> Source : <a href="https://delphia.substack.com/p/fine-wine-the-liquid-investment-thats?s=r" target="_blank" rel="noopener">Alt Class</a>
<a href="#_ftnref3" name="_ftn3">[3]</a> Source : <a href="https://www.liv-ex.com/2022/04/fine-wine-market-q1-2022/" target="_blank" rel="noopener">Liv-ex</a>
<a href="#_ftnref2" name="_ftn2">[4]</a> Source : <a href="https://www.knightfrank.com/research/article/2021-03-01-covid19-and-its-impact-on-luxury-investments" target="_blank" rel="noopener">Knight Frank</a>
<a href="#_ftnref1" name="_ftn1">[5]</a> Source : <a href="https://www.liv-ex.com/2009/07/fine-wine-investment-long-term-view/" target="_blank" rel="noopener">Liv-ex</a>
<a href="#_ftnref4" name="_ftn4">[6]</a> Source : <a href="https://www.thedrinksbusiness.com/2022/05/this-is-why-burgundy-is-going-to-get-even-pricier/" target="_blank" rel="noopener">The Drinks Business</a>
<a href="#_ftnref1" name="_ftn1">[7]</a> Source : <a href="https://www.theguardian.com/business/2022/may/05/bank-england-raises-interest-rates-inflation-cost-of-living" target="_blank" rel="noopener">The Guardian</a>
<a href="#_ftnref1" name="_ftn1">[8]</a> Source : <a href="https://www.netwealth.com/ourviews/diversification-is-the-only-free-lunch-in-investing/" target="_blank" rel="noopener">NetWealth</a>
<a href="#_ftnref2" name="_ftn2">[9]</a> Source : <a href="https://www.knightfrank.com/research/article/2021-03-01-covid19-and-its-impact-on-luxury-investments" target="_blank" rel="noopener">Knight Frank</a>
<a href="#_ftnref1" name="_ftn1">[10]</a> Source : <a href="https://www.gov.uk/capital-gains-tax/rates" target="_blank" rel="noopener">HMRC</a>
<a href="#_ftnref1" name="_ftn1">[11]</a> Source : <a href="https://www.statista.com/statistics/325326/uk-lse-average-daily-trades/" target="_blank" rel="noopener">Statista</a>

Seven Delicious Reasons to Invest in Fine Wine

The esteemed northern Rhône producer E. Guigal has acquired Château d&#8217;Aqueria in Tavel, one of the jewels of the southern Rhône. The celebrated maison made the purchase from the de Bez family and the estate spans 242 hectares with 168 under vine. Some 100 acres are in Tavel with the remainder in the neighbouring Lirac appellation.
This isn’t <a href="https://www.guigal.com/en/" target="_blank" rel="noopener">Guigal’s</a> first purchase in the southern Rhône; the maison bought Domaine de Nalys – now Château Nalys – five years ago. It had previously sourced grapes from there over the course of three centuries for its négociant arm.
Château d’Aqueria dates back to 1595, when Louis Joseph d’Aqueria purchased the land for grape growing. The estate has been bought and sold over the centuries and, most recently, Paul de Bez’s sons, Vincent and Bruno, were in charge of it until this new purchase. 
The Tavel appellation lies just across the Rhône river from Châteauneuf-du-Pape and spans some 933 hectares. The region is famous for producing complex and deeply coloured rosé wines from primarily Grenache and Cinsault grapes, with Syrah and Mourvedre supporting. Tavel rosé must have at least 11% alcohol which renders it suitable for ageing.
The estate produces approximately 16,000 cases of wine each year and it will be kept by E. Guigal as a separate domaine, aside from the négociant arm. 
Lirac is gaining more and more interest recently as Châteauneuf-du-Pape lovers look to this region which shares a similar terroir. Producers from Châteauneuf have been buying vineyards here and making more accessibly priced white and red wines from old vines. 
Philippe Guigal, winemaker and CEO, said that the team is ‘eager to make its contribution to Château d&#8217;Aqueria’ and that its first project will be to ‘drive forward the practice of biological-ecological viticulture, with the help of the existing team at the Château.’

E. Guigal Buys Château d’Aqueria

The Bordeaux En Primeur 2021 campaign is set to begin this quarter. Critics and the wine trade have descended – in person this year – on the famous French wine region to taste samples of last year’s vintage which will be sold as new releases while the wines are still in barrel.
Performance isn&#8217;t just about how good a wine or a vintage is though, growth can be seen across the spectrum. For instance, Château Lafite Rothschild 2013 (Neal Martin, 90 points), is up 110% since release, Carmes Haut Brion 2012 (Antonio Galloni, 94 points) is up 160%.  Younger wines haven&#8217;t had the chance to move as far yet, but there are still good numbers to be found: Château Beychevelle 2017 is up 30% and Château Pontet-Canet 2019 45%
<h2>Initial Thoughts on the Bordeaux 2021 Vintage</h2>
After speaking with winemakers, the négociants who sell the wine, journalists and other members of the trade, the general opinion is that 2021 is a fresh and approachable vintage that’s good quality and that many remarked is similar to other cooler years. WineCap will make a full assessment of it once critics’ scores and release prices are out in the next quarter. 
2021 was a more challenging year than each of the three vintages that preceded it. January started off mild but with some heavy rain. Temperatures were cooler than normal which helped create wines with a fantastic freshness to them with lower alcohol levels. Many producers experienced frosts in April and May. However, some châteaux weren’t affected at all due to their terroir’s elevated topography, as is the case with Pomerol’s Troplong Mondot which had almost no loss of yield. Rain in mid August and September helped promote downy mildew in the vineyard which affected grapes, although this wasn’t a problem for all châteaux. Merlot was the most affected grape as it is an early ripener and is also the most prone to suffer from mildew. This meant that production levels were down, as rigorous sorting in the vineyard allowed only the finest grapes to be used. Many producers on both the Left and Right Bank held off harvesting until as late as possible in the hope of warmer weather to ripen grapes a final bit more. This paid off as those who waited were rewarded with sun and higher temperatures. 
<h3>New Technology Helping Create the Best Bordeaux Wines</h3>
Producers now have excellent technology at their disposal to help them identify and select the finest grapes possible. In 2021, many châteaux used optical sorting machines that have cameras and/or lasers to determine grapes’ colour, size, structure and chemical composition. Another technique that was employed last year and that is gaining more and more prominence is density sorting. Grapes are bathed in a sugar solution at a sweetness level the winemaker desires. Ripe grapes that meet the desired sugar level sink to the bottom. These methods are enabling winemakers to create fantastic wines even during a challenging vintage. 
Of course, while these machines are gaining more popularity, the hard work begins in the vineyard: taking care of the vines and hand sorting grapes there before further quality control can take place in the winery. Château Pontet-Canet in Pauillac is the posterboy for good vineyard management and – in particular – biodynamic practices as it retained most of its yield in 2021 as it was prepared for inclement weather.  
2021 appears to be continuing a trend of fresher wines that are approachable earlier, while still having the potential to be able to age for decades to come.
<h3>Left Bank Bordeaux</h3>
As with many of the Bordeaux wines we tasted regardless of appellation, the Left Bank producers were happy with their wines, despite not having been able to make as much of them as they’d like. Pessac-Léognan’s Château Haut-Bailly and Saint-Julien’s Château Beychevelle were textbook examples of the 2021 vintage, delivering fantastic freshness, purity of fruit and fine tannins.
<h3>Right Bank Bordeaux</h3>
What stood out in Saint-Emilion and Pomerol was the higher percentage of Cabernet Franc used in the 2021 blend, typically with Merlot, as it is a late-ripening grape. Château Angelus’ 2021 Grand Vin contains the highest amount of Cabernet Franc on record: 60%. This gives the wine fantastic freshness and soft tannins. It was a similar story for many producers on the Right Bank, with higher levels of the grape used than usual. 
<h3>The Outlook for Bordeaux En Primeur 2021</h3>
While we eagerly await the release prices and critics’ scores that will appear during this quarter, the general opinion is that the 2021 vintage has produced fresh, approachable wines that are good quality. With yields down significantly in the case of some châteaux, we can expect there not to be as many bottles released as in previous years. Therefore it’s reasonable to expect that producers won’t be pricing these En Primeur wines at a discount. As always, it’s a question of individual châteaux prices.
Want to keep up-to-date on the Bordeaux 2021 En Primeur campaign? <a href="https://winecap.com/download-guide" target="_blank" rel="noopener">Sign up here</a> to receive the latest news and releases.

Bordeaux En Primeur 2021: Initial Thoughts

Rare Burgundy wines are set to feature in Christie’s upcoming ‘Luxury Week’ in May and also in its Finest and Rarest Wines and Spirits sale in June. Spring heralds warmer weather, new growth and for one of the world’s most famous auction houses, a series of auctions that include some of the finest wines, watches, jewellery and handbags ever produced.
<h2>Christie’s Auction House </h2>
Last year’s sales of luxury items at Christie’s was incredibly successful, topping just over $980m and the highest since 2015. Interestingly, 35% of buyers across all categories were new to the business and 32% of them were millennials, according to Christie’s CEO Guillaume Cerutti. It’s these new buyers that are driving the current buoyancy at the top end of the luxury auction market and that continue to push prices up on rare, collectible wines. What’s more, Christie’s has heavily invested in technology, a move brought about by the pandemic, in order to livestream auctions.  
All eyes will no doubt be focused on the upcoming rare Burgundy auction in June. It’s sure to be a real highlight as all of the 45 lots have been brought above ground from the deep, vaulted cellars of King’s College Cambridge. King’s College is said to have one of the most well respected cellars out of all of the university colleges and a real heritage when it comes to wine as its University Wine Society was founded in 1792. The college bought all of the wines on release from UK importer Richards-Walford and the cases were then moved to the university’s cellars, where they have remained since then. Only four wine stewards have been appointed in the past two centuries and their enviable role is to act as the cellar’s guardians and curate its collection.
<h2>A Wine Investor’s Dream</h2>
The 45 lots are set to feature rare Burgundies from such highly sought-after producers as Henri Jayer and his nephew Emmanuel Rouget, who is now the proprietor of some of Jayer’s most famous vineyards. Wines from these producers are expected to hail from such revered appellations as Echézeaux and Vosne-Romanée Cros Parantoux. Bids are sure to reach eye-wateringly high amounts for stand-out wines from a region that has tiny production levels.
Speaking about the upcoming auction, Adam Bilbey, Christie’s Global Head of the Wine and Spirits Department commented: “The hallowed cellars of King’s College, Cambridge are steeped in such history and tradition that this sale will garner the imagination and attention of wine lovers around the world. This small glimpse into the King’s College cellar will most certainly be a highlight of Christie’s wine sales this season”.
Want to find out more about rare Burgundy wine? Download our <a href="https://winecap.com/learn/burgundy-region-report">Burgundy report</a> and discover why the region and its producers’ wines command some of the world&#8217;s highest prices.

Rare Burgundy Auction at Christie’s

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Our first quarterly report, analysing the trends that shaped the <a href="https://winecap.com/about-us">fine wine market</a> in the beginning of the year, is now available to download. The report examines how the global situation has impacted fine wine’s performance and the regions, producers and wines to follow.
The fine wine market was keenly poised at the beginning of the year after a record-breaking 2021. This helped it brave the volatility that traditional assets failed to withhold. Fine wine indices continued to rise despite slowing GDP growth, high inflation and the turmoil brought by Russia’s war with Ukraine. Burgundy, in particular, delivered a standout performance following a successful 2020 En Primeur campaign. Bordeaux continued to lose trade share to other regions, while California and – in particular – Champagne attracted a new wave of investment interest.
The start of the year was all about bubbles. Champagne did not only dominate the list of wines on the rise, but the region took four out of the five spots of the most traded wines this quarter. Louis Roederer’s Cristal itself filled three of these.
Judging by the first quarter, 2022 is set to be an exciting year, abound with opportunities for fine wine. The ever-decreasing supply of the most sought-after wines is pushing up prices but also leading to a market expansion, as buyers seek value and (re)discover regions, new and old. The perceived stability of fine wine is providing protection in an environment of rising costs and inflation and is bringing more investors to the most delectable of markets.
WineCap’s independent market analysis showcases the value of portfolio diversification and the stability offered by fine wine. Download our brand new quarterly report for your summary of the past quarter in fine wine.

Q1 2022 | Report

Champagne looks set to capitalise on its excellent 2021 performance. Last year was fantastic for Champagne brands as sales figures for the category rocketed beyond pre-pandemic levels. Over 350 million bottles were exported worldwide last year and the appetite for French bubbles – synonymous with luxury, indulgence and good times – gained the most ground in the US which has now surpassed the UK (37.4%) as the largest export market by volume (39.1%). 
This price growth can be attributed to two things: restaurants, nightclubs and bars reopening worldwide, as well as ultra high net worth collectors focusing their attention on the category. With less supply available, prices surged.
The sky was the limit for Champagne in 2021 as it ended the year up 40% and at a record high level. 2022 looks incredibly promising for the category too as it’s up 9.6% so far this year. 
<h2>Louis Roederer Cristal Rosé</h2>
Prestige Champagne brands were the key price drivers in 2021 and the headline acts with the top performance were highly sought-after names including Louis Roederer Cristal (with high demand across the 2008, 2012, 2013 and 2014 vintages). Interestingly, the most traded wine by value was the 99 point scoring Louis Roederer Cristal Rosé 2012 as the market for rosé Champagne expands. Other Grande Marques with top billing were the ultra-premium Salon (2007, 2006 and 2002 vintages), as well as Taittinger’s Comtes de Champagne 2006 and Dom Pérignon’s Rosé 2005.
<h2>Non-Vintage Champagne</h2>
However, it wasn’t just vintage Champagne that sparkled. The trade of non-vintage (NV) Champagne also broke new ground and made up the most-traded part of the category. The market has also broadened with NV Champagne’s trade share up from 5.1% in 2018 to 17.6% in 2021.
With such impressive performance in 2021 as well as in Q1 this year, there’s no doubt that Champagne has now cemented its place in the secondary market for fine wine. What’s more, there is no other region where the top wines are still this affordable. Savvy investors who hold top Champagne know just how approachable this category is, when compared to the most prestigious Burgundies, top Napa wines and the very best of Bordeaux.
Want to find out more about investing in Champagne? Read WineCap’s in-depth analysis in our <a href="https://winecap.com/learn/champagne-report-2022" target="_blank" rel="noopener">Champagne Report</a>.

The Champagne Brands Driving Price Growth

Bordeaux wine producers braced themselves this week as temperatures dropped as low as -7℃ in certain areas. It’s the second year in a row that the region has experienced Spring frosts and the coldest temperatures for this season since 1947. As châteaux try to ward off the frost that can wreak havoc on their entire crop, we’ve taken a closer look at how it impacts vines and what producers can do to try and combat it.
<h2>Frost and Wine: How Does it Affect Vines?</h2>
Spring frosts happen when cold air below 0℃ collects at ground level and freezes any water that has settled on surfaces. If this happens to new buds that have burst it kills them. The impact of this is huge and can impact the vintage yield significantly.
<h3>Vineyard Frost Protection</h3>
There are several ways that wine producers can try to combat frost in the vineyard. One popular and traditional method in French winemaking regions is the use of ‘bougies’, literally ‘candles’ in French, but more often ‘burners’, using old oil drums. They are placed throughout the vineyard to generate heat which helps the air to circulate and prevents the cold air from settling and causing the frost.
Wind machines are more common in areas that are prone to frosts. They act as large fans with a heating element inside and aim to keep the temperature at ground level above freezing. You might have even seen photos of some producers using helicopters above the vineyards in order to circulate the air!
Sprinklers are also used to spray water onto the vines. As the water freezes around the green tissue, it releases some heat which gives vines just enough protection to fight off the frost. 
One Bordeaux producer who has fought frost with 100% success using another method this year is Liber Pater in the Graves region on the Left Bank. Owner ​​Loic Pascquet no longer bottles his wines adhering to the AOC system which has strict production requirements. Instead, he chooses to bottle his wines as ‘Vin de France’ and is free to use frost nets in the vineyard, something that AOC classified producers are not permitted to do. Frost nets cost half the price of burners and are also reusable.
<h3>The Impact on the 2022 Vintage</h3>
While we don’t know just yet the full impact the Spring frosts may have had in Bordeaux, it’s likely that yields will be down. With less fruit available to make the wines, the amount of the 2022 vintage released on the market could be drastically reduced, meaning that the global demand for Bordeaux would struggle to be satisfied.
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Aerial shot showing burners in Bordeaux vineyards

Spring Frosts in Bordeaux

Our Burgundy Report is available to download. Discover more about this historic wine region that produces some of the world’s most expensive and sought-after wines.
With only two primary grape varieties and three classification ranks, Burgundy may appear simple, but with dozens of controlled places of origin (AOCs), hundreds of producers and many thousands of wines, it can be fiendishly complicated.
Growing liquidity and increased awareness of the sector has made Burgundy much more accessible to those looking to make a return and its prominence has grown significantly over the last decade.
Thanks to Burgundy’s status and its tiny production levels, early investors in the sector have seen eye-watering growth: upwards of 2000% in 15 years for some wines. This fascinating and wide-ranging region is a significant one for both wine enthusiasts and investors. Part of the region’s allure is due to its limited production levels. Only small quantities of particular wines are produced and this only adds to the appeal of the often hard-to-find and highly sought-after top quality bottlings.
The volume, value and breadth of trading has increased significantly and wine values have increased dramatically over the last decade; the major index is up almost 200% in the past ten years. After a quieter 2019–2020, it appears that the Burgundy market is on the up and it now makes up around 25% of all trades on the largest platform.
WineCap has analysed the data and the fundamentals suggest that continued growth is likely. With the market now more active than it was five years ago, all portfolios should include some Burgundy. Download the report to discover further market analysis and lesser-known producers with impressive recent performance.

Burgundy | Region Report

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There is no question that appreciation of wine is increasing all over the world which, subsequently, has piqued the interest of potential fine wine investors across the globe.
The fine wine market has established itself as a low-risk marketplace for anyone looking to get into the investment world or wanting to expand their existing portfolio. But why is it so popular?
In this article, discover why more and more people are investing in fine wine and, if you’re considering becoming a fine wine investor yourself, find out how to get started.
<h3>Differences between fine wine and other investment methods</h3>
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<h4>An alternative investment</h4>
An alternative investment is any way of growing your capital that doesn’t fit into the traditional categories, such as equity and bonds.
Alternative investments, such as fine wines, allow investors to diversify their investment portfolios. Doing so decreases the risk over their entire portfolio, giving them the chance to strengthen what they already have.
<h4>Low correlation with the stock market </h4>
The fine wine market doesn’t correlate with the stock markets because its value relies on the good old-fashioned supply and demand model.
Investment-grade wine producers only make a small amount of wine every year, this already increases its value. As soon as someone drinks that bottle of wine, there is one less bottle to buy, but the demand for that wine doesn’t go away.
This continuous cycle is what often gives fine wine investors such a healthy return on investment, unlike traditional investment methods where prices often rise and fall unexpectedly.
<h4>It’s a tangible asset</h4>
A tangible asset means it is a physical object. A fine wine investor invests in a real-life, physical product, which means they have direct ownership of that wine and can crack open and enjoy it should they wish to.
This differs to stocks and shares, where although you may receive paper confirmation, you don’t truly own the product – making it less secure than tangible assets.
<h4>Low volatility</h4>
Volatility is a term to describe the rate prices of an item increase and decrease in a market over a period of time.
Traditional investment methods, like stocks and bonds, have very high volatility. Prices can increase and decrease for any reason at any given time. Indeed, sometimes it only takes one prominent and influential figure to publicly criticise it for its price to dramatically drop.
The fine wine market has low volatility with stable price growth over time, which is why fine wine is considered a low-risk investment.
<h3>So, how can you turn fine wine into profit?</h3>
One of the many great things about fine wine investment is that you can take it up whether you are an investment expert, or a hobbyist looking to expand your portfolio.
If you are new to fine wine investment and would like some help deciding where to invest your money, you could look into working with a fine wine investment company like WineCap.
Here at WineCap, we offer expert, unbiased advice on strategic investment opportunities and can walk you through how to get the most out of your investment.
We also store your fine wine in government bonded warehouses, ensuring your wines are stored in optimum conditions.
Learn more about wine investment and <a href="https://winecap.com/schedule-a-call" target="_blank" rel="noopener">schedule a free consultation today</a>.

The Fine Wine Market is Seeing More & More Investors

If you’re looking for viable investment opportunities then you’ve likely considered a range of potential investments, including stocks and wine. But of these two drastically different investment arenas, which is the safer option during the current economic climate?
In this article, discover the pros and cons of investing in wine and investing in stocks to help you make a more informed decision about which investment direction is best suited to you.
<h3>The pros of investing in wine</h3>
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<h3>A low-risk investment</h3>
Fine wine is a physical asset, so it represents a very low-risk investment. When you invest in the market, your wines are stored in optimal conditions within a secure bonded warehouse.
<h3>Wine is a physical, tangible asset </h3>
Wine, unlike stocks, is a tangible asset created to be drunk and enjoyed. This gives it intrinsic value as a medium to long-term investment.
<h3>A relatively resilient marketplace  </h3>
<a href="https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/fine-wine-investors-toast-despite-stock-market-tumble-58149302" target="_blank" rel="noopener">According to S&amp;P Global</a>, wine is one of the few luxury assets to have withstood the harsh impact on assets triggered by the coronavirus pandemic, proving the market relatively resilient. Indeed, wine is widely considered to be a ‘safe haven asset’.
<h3>The cons of investing in wine</h3>
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<h3>Portfolio valuation can be tricky</h3>
Traders tend to purchase and sell wine at a less frequent rate than stocks are purchased and sold, and there is no standardised international market. These factors can make it challenging for wine investors to get an accurate idea of the value behind the wines in their portfolio.
<h3>Selecting well-known wines could be disadvantageous</h3>
Many wine investors tend to choose mainstream wines from well-known wine regions such as California, Burgundy, or Bordeaux. Owing to their ubiquity, these wines can have a reduced chance of transitioning to rare wine status.
<h3>Selling wine can take a while </h3>
It can take wine investors some time to sell a bottle of wine in their portfolio, particularly when trying to navigate the marketplace without expert support. This can make it more difficult to access funds quickly should the need arise.
<h3>The pros of investing in stocks</h3>
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<h3>The potential for large cash gains</h3>
Though the prices of individual stocks rise and fall daily, the potential to grow your money over time can be significant. Investing in stable companies that have the ability and intention to grow can often result in profit for investors.
<h3>Quick purchases and sales</h3>
Thanks to their liquidity, stocks can usually be bought and sold fairly quickly, and often at a fair price.
<h3>Diversification</h3>
The stock market gives investors the ability to build a diverse stock portfolio across a wide variety of different industries and sectors. This diversity can help to reduce the overall risk of stock investment.
<h3>The cons of investing in stocks</h3>
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<h3>An erratic, volatile marketplace</h3>
Unlike the fine wine market, the stock market is a high-risk, erratic and volatile investment arena. Although stocks can be highly lucrative when invested in tactically and sensibly, the rapid, widespread price fluctuations can make it difficult to achieve the desirable returns on your investments.
<h3>Limited company information </h3>
It’s important to remember that when you invest in stocks you are investing in a public company. However, investors may not be able to access all relevant information about the company, which can make it more difficult to make good investment decisions.
<h3>Capital Gains Tax</h3>
If you make a profit on shares you sell, then you will likely have to pay Capital Gains Tax, depending on your total gains for the tax year.
However, it is worth noting that you do not have to pay Capital Gains Tax when you sell fine wine because the HMRC classes it as a ‘wasting asset’.
<h3>Wine Vs. stocks – which is the safer investment?</h3>
While the stock market represents a high-risk, high reward investment arena, investing in wine tends to offer more security – which is an important consideration if you want to create a sustainable investment portfolio.
Fine wine has a long, proven history of robust returns on investment. According to the world’s largest online wine stock exchange, Liv-ex, fine wine has delivered 13.6% annualized returns over the last 15 years – outperforming most stock markets. One need only review the <a href="https://www.liv-ex.com/news-insights/indices/">Liv-ex fine wine indices</a> to see how modest but consistent annual growth adds up over time.
So, in the case of wine vs. stocks, it is our opinion that wine is a much safer investment.
<h3>Talk to our wine investment experts</h3>
We hope you found this article helpful. If you’d like more information or advice about investing in wine, simply schedule a free 30-minute consultation with one of our wine investment experts.
<a href="https://winecap.com/schedule-a-call" target="_blank" rel="noopener">Schedule your free consultation</a>

Investing in Wine Vs. Investing in Stocks – Which is Safer?

Our Bordeaux En Primeur 2020 Report is available to download. Discover our wine investment experts thoughts on 2020, a vintage that has widely been heralded by prominent wine critics as excellent and the third in a row of top Bordeaux vintages. Find out which Bordeaux sub-regions and producers they feel delivered top class wines that are worth seeking out. 
As with the two vintages that preceded it, conditions in 2020 favoured producers with multiple plots of different soil types due to the abundance of both sunshine and rainfall. Right Bank clay soils were better able to retain water and thus sustain the vines. 
Although Bordeaux En Primeur 2020 is undoubtedly a fantastic vintage, investors are advised to be selective and search for relative value rather than being led solely by critics’ scores. 
Through careful study and data analysis, WineCap provides insight into the wines that we feel present both value and opportunity for capital growth. With our bespoke, industry-leading graph and analysis tools we have concluded that the wines selected in this report are attractive prospects and that any carefully built investment portfolio should consider 2020 Bordeaux.
Click the button below to download our Bordeaux En Primeur Report. Do not hesitate to get in touch and speak to one of our wine investment advisors to reserve your allocations.

Bordeaux 2020 | Vintage Report

Hello, we’re WineCap and we’ve changed our name from Westgarth Wine Investments to give it a bit of a refresh, invested more in our technology, streamlined the new site and have added extra features that benefit our visitors. You can now schedule a <a href="https://winecap.com/schedule-a-call" target="_blank" rel="noopener">free 30-minute consultation</a> with one of our investment experts. We&#8217;ve also created the <a href="https://winecap.com/learn" target="_blank" rel="noopener">Academy</a> which is a hub of online resources.
<h3>New Name. Same Team.</h3>
We’re still the same independently-owned company and team who’ve been proud to serve you for the past ten years and who will continue to offer expert investment advice for the next chapter of your wine journey.
<h3>Do I Need to do Anything?</h3>
You don&#8217;t need to take any action. Your online details remain the same, there are no changes to the wines you hold or where they&#8217;re stored and you can phone the same people using the usual number.
<h3>What&#8217;s New?</h3>
You&#8217;ll see our updated branding on our new website. We&#8217;ve also launched the <a href="https://winecap.com/learn" target="_blank" rel="noopener">WineCap Academy</a> where you can learn more about the producers you invest in, stay up-to-date on what&#8217;s been happening in the market and get the low-down on everything in the wine investment sector. What&#8217;s more, you can expect new quarterly reports in order to stay informed with market trends.
So, a big &#8216;hello&#8217; and &#8216;welcome&#8217; from all of the team here at WineCap and we&#8217;re excited about this new phase of our wine investment journey together.

Welcome to WineCap

<h1 data-pm-slice="1 1 []">Considering investing in Champagne?</h1>
It&#8217;s not necessarily the most costly, nor the rarest of fine wine. However, Champagne is supremely consistent, making it arguably one of the strongest and most appealing sectors of the fine wine market.
Its steadfast presence can be attributed to its brand strength, liquidity and an aura of exclusivity it maintains despite being well-known in the main. 200-plus years of expert marketing by the best producers is what arguably makes Champagne the most broadly understood luxury good in the world.
As with all fine wine, as Champagne ages, its quality improves. As it is consumed, its supply decreases. This virtuous circle drives prices over time. This luxurious bubbly tends to be released later than other investable wines and as consumption begins in earnest immediately, we can see the impact of this cycle faster.
<h3>Top Champagne Brands to look out for</h3>
For those considering investing in Champagne, the most important brands to keep in mind are Dom Pérignon, Cristal, Krug, Taittinger and Salon. Volumes produced vary considerably from producer to producer. Dom Pérignon is widely believed to make around 4,000,000 bottles a year across all their wines. In contrast, in 2020 Salon released just 8,000 bottles of their 2008.
<h3>The Best Champagne Vintages </h3>
The strongest vintages include 1996, 2002 and 2008. Unlike in Bordeaux or Burgundy, producers tend not to release vintage wines every year, emphasising the exclusivity. This means there are vanishingly few &#8216;bad&#8217; Champagne vintages. Although of course, some are superior to others, it is no more necessary to focus on only exceptional vintages in Champagne than it is in other regions.
Over the past five years Krug&#8217;s value is up 75% and Dom Pérignon up by 65%. These numbers demonstrate that Champagne is a smart addition to any diversified investment portfolio and should no longer be considered just a celebratory indulgence.
Want to find out more about investing in Champagne? <a href="https://winecap.com/learn/champagne-report-2022" target="_blank" rel="noopener">Read our in-depth report here</a>.

Invest in Champagne

Fine wine investment is increasingly gaining popularity amongst beginners and novices looking to reap the benefits of this alternative asset. Not only is it a proven way to diversify and strengthen an investment portfolio, but also an enjoyable pastime for wine enthusiasts and budding connoisseurs.
Surging prices regularly push fine wine investment into the spotlight, and headlines are filled with stories of investors who bought wine at low prices, then sold it years later for thousands. But how and where do you get started as a beginner? And what are the wine investment returns that you can expect?
The following guide provides an overview of the fine wine investment market and how it works in practice.
<h3>How big is the wine investment market?</h3>
Investing in wine is no new phenomenon. In fact, it has existed in different forms since antiquity, as wine was circulated and traded throughout the ancient world by Greeks, Egyptians, Phoenicians, and Romans. The writings of Thomas Jefferson provide one of the first pieces of evidence of a premium charged for an older wine. In 1787, he wrote that the 1786 vintage for top Bordeaux wines cost 1800 livres per tonneau compared to 2000 livres for the older 1783. Through the centuries, shrewd wine lovers have been selling part of their collections as a way of subsidising their consumption, leveraging the gains of a <a href="https://winecap.com/learn/fine-wine-taxation-2022" target="_blank" rel="noopener">uniquely rarifying asset</a> against their own cellars.
Today, the market is transparent and open for beginners as well as experienced investors looking to embark on their wine journey. Investing in fine wine is easier than ever, thanks to specialised wine investment companies, relying on current market data and the latest technology.
The global wine market is forecast to reach US$525 billion by 2025. But while fine wine has emerged as a popular alternative investment, <a href="https://winecap.com/learn/your-wine-investment-questions-answered" target="_blank" rel="noopener">not every wine is investment worthy</a>. For example, the majority of wines produced in renowned regions, such as Burgundy and Bordeaux – perhaps surprisingly – often won’t appreciate in value. In fact, of all the wines made worldwide, only a very small percentage have the potential to improve as they age, and an even smaller percentage of that group has the capacity to see its price rise.
Precisely this scarcity of investible wines is one of the main drivers behind wine investment’s profitability. The limited supply of collectible wine leads to price increases, especially for labels in high demand. This is why it is important to keep abreast of the latest market trends and factors influencing global appetite.
<h3>More fine wine investment opportunities than ever before</h3>
Historically, Bordeaux’s classified growths have been the leading force on the fine wine investment market. In 2010, Bordeaux took 96% of all trade on the global marketplace for wine. <a href="https://winecap.com/learn/q1-2022-report" target="_blank" rel="noopener">Today</a>, it accounts for less than a third of this market by value.
The main reason behind its declining trade share is that the fine wine investment market is bigger and broader than ever before. Other French regions like Burgundy, Champagne and the Rhône, USA, Italy (led by Tuscany and Piedmont), Germany, Spain and Australia are increasingly seen as reliable sources of considerable wine investment returns.
Investing in fine wine is thus not limited to a small group of wines, contrary to what one might expect. There are more opportunities than ever before that can be suited to your stylistic preferences and budget. The collectors’ market is booming, with <a href="https://winecap.com/learn/q1-2022-report" target="_blank" rel="noopener">record number of investible wines</a> trading right now.
<h3>Greater fine wine investment returns</h3>
As global demand for fine wine has grown, the investment returns have increased too. <a href="https://winecap.com/learn/burgundy-region-report" target="_blank" rel="noopener">Burgundy</a> is a prime example. Thanks to its iconic status and its tiny production levels, early investors in the sector have seen eye-watering growth: upwards of 2000% in 15 years for some wines. The volume, value and breadth of trading has increased significantly, and wine prices have risen dramatically over the last decade; the region’s major index is up almost 200% in the past ten years.
Meanwhile, investors in <a href="https://winecap.com/news/invest-in-champagne" target="_blank" rel="noopener">Champagne</a> have benefitted from supremely consistent returns, although it is not the most expensive or the rarest of fine wines. Its brand strength and distribution network, however, remain unparalleled.
Prices for different regions and wines have risen at a different pace. Region and wine-specific factors thus play a role in the returns that an investor can expect, the cost and length of the investment.
<h3>How long do I need to invest in fine wines for?</h3>
Fine wine is considered a medium to long-term investment. As a general rule, we advise our clients to hold their wines for three years at the very least.
Many collectible wines have long ageing windows, between ten and 50 years. As the scarcity and quality of fine wine appreciates over time, so does its value. The premise of fine wine investment is to buy wine when it’s young, then sell it once it’s older and more valuable. There are other external factors that may help determine how quickly a wine may deliver the desired returns such as critic scores, supply/demand and significant events related to the region or the producer.
For instance, the price of the Super Tuscan Sassicaia 2015 went up 25% in the day when the American publication <a href="https://www.winespectator.com/" target="_blank" rel="noopener">Wine Spectator</a> announced its ‘Wine of the Year 2018’. Those buying and re-selling the wine on the day would have made a small profit; however, those holding the wine since release would have seen its value rise over 160% to the present day.
As a long-term low-risk investment, fine wine doesn’t lose its value overnight. Where share prices may increase one day and decrease the next, fine wine provides stable returns year after year. Its low volatility has led many to consider it the best ‘safe-haven’ asset – a great advantage particularly in times of market turmoil.
Unlike mainstream assets, fine wine is fairly insensitive to macro-economic events. When global markets tumbled due to ongoing Covid-19 restrictions and upon Russia’s invasion of Ukraine, fine wine remained resilient. The returns of leading fine wine indices were greater than the FTSE100, S&amp;P500 and even other safe investments such as gold.
<h3>How do I start investing in wine?</h3>
There are a lot of decisions you need to make when taking on wine investment. Wine investment experts like our team here at WineCap can help you make decisions relating to the following factors:
<h3>Set a wine investment strategy</h3>
The first step is to set your budget. Consider how long you would like to hold your wines for and your preferred investment strategy. Fine wines command a range of prices depending on the producer, how much of their wine is made and the wines’ age. Make sure to set your budget before embarking on building your portfolio so you can ensure you have exposure to all countries and regions.
<h3>Speak to a wine investment expert</h3>
There are different routes to accessing the wine investment market, such as through specialised retailers and auction houses. Expert wine investment brokers offer unbiased advice on strategic investment opportunities and can help you build your portfolio, based on your preferred length of investment and budget. While <a href="https://winecap.com/about-us" target="_blank" rel="noopener">WineCap</a> doesn’t charge any annual fees, most wine investment companies do, so be sure to do your research and be aware of any fees your portfolio might incur.
<h3>Select world-class wines for your portfolio</h3>
A wine investment expert will help you find the wines best suited for your investment portfolio. <a href="https://winecap.com/about-us" target="_blank" rel="noopener">WineCap</a> has formed long-lasting relationships over the past decade with négociants, wholesalers and private collectors. This means that we have access to some of the world’s most prized wines. What’s more, our unique proprietary technology analyses over 400,000 wine prices a day to identify the right, undervalued wines to buy and sell across the global market at the right time and price.
<h3>Store your wines professionally</h3>
Choose to keep your wines in government bonded warehouses as this will ensure they are professionally stored in temperature-controlled conditions best-suited for ageing wines. World-class care ensures that when you come to sell, your wines&#8217; provenance will quickly secure maximum prices.
Fine wine investment can be daunting if you are a beginner, but with a little practice and help you can soon enjoy the benefits of the best-performing luxury asset.
Ready to get started now you know more about how to invest in wine? <a href="https://winecap.com/schedule-a-call" target="_blank" rel="noopener">Speak to one of WineCap’s investment experts</a> to discover the next steps on your wine journey.

Fine Wine Investment for Beginners

Wine has been a staple at the dinner table and in people’s lives for centuries, but did you know the quality of wine increases over time? Which subsequently leads to an increase in value? These factors have made wine collection a popular hobby for many.
Wine collectors will buy rare and expensive wines, store them for a number of years and then sell them for a higher price. This is known as wine investment.
In this article, we take a look at ten of the world’s most expensive wines, summarising their prices, types, grape varieties and regions.
<h3>What makes wine so expensive? </h3>
Collectible wines, or investment-grade wines, are wines that could increase in price from their original cost as time goes on.
There are several elements to question to find out whether your wine is investment-grade or not, such as:
<ul>
<li>Is the brand well known? Reputable brands create high-quality wines that have a high demand, which can mean a higher price.</li>
<li>Does the wine have positive reviews from reputable critics?</li>
<li>Will the quality increase when the wine ages?</li>
<li>How many bottles of the wine have been produced? A limited-edition wine is going to be more expensive than a winemaker that produces many hundreds of thousands of bottles a year.</li>
</ul>
<h3>Ten of the world’s most expensive wines</h3>
Taking into account what is mentioned above, we have looked into ten of the most expensive wines in the world and why they carry such a high price tag.
<h3>Domaine Georges &amp; Christophe Roumier, Musigny Grand Cru </h3>
Producer: Domaine Georges &amp; Christophe Roumier
Average price: £13,595
Wine type: Red
Grape: Pinot Noir
Region: Burgundy, France
Domaine Georges Roumier is a wine producer that creates highly commended and expensive wines, based in the village Côte de Nuits in France. The vineyard consists of over approx. 28.5 acres of land across multiple regions of Burgundy.
&#8216;Grand Cru&#8217; is a classification of the quality of wines produced across Burgundy and Alsace and is the highest grade you can get. It means that the land the grapes grow on and the vineyard itself is of high quality, reaffirming the value of the wine.
<h3>Château Margaux</h3>
Producer: Château Margaux
Price: $225,000 (gained by insurance reimbursement in America)
Wine type: Red
Grape: Bordeaux blend
Region: Bordeaux, France
A bottle of this wine, created in 1787, was said to be a part of Thomas Jefferson’s personal collection.
A wine trader called William Sokolin later acquired it and took it to a dinner in Bordeaux, where the waiter knocked it off the table and smashed the bottle. Sokolin was later reimbursed with $225,000 by his insurance company, but the bottle was originally thought to be worth $500,000.
<h3>Domaine Leroy, Musigny Grand Cru </h3>
Producer: Domaine Leroy
Average price: £31,691
Wine type: Red
Grape: Pinot Noir
Region: Burgundy, France
Founded in 1868 by wine merchant François Leroy, the Domaine (vineyard) is now owned by Lalou Bize-Leroy, who also owns Domaine d&#8217;Auvenay.
This dry red wine is produced from Pinot Noir grapes and is the by-product of biodynamic farming. This ethical approach to farming provides nutrients to the plants by using their own composting measures, as opposed to using chemical fertilisers. Although more labour intensive, this method produces high-quality crops and is better for the environment.
<h3>Krug Vintage Brut Champagne </h3>
Producer: Krug
Price: Sold for £14,800
Wine type: Sparking wine
Grape: Champagne
Region: Champagne, France
Krug is known for being one of the renowned houses in the Champagne region, making their wines some of the most sought-after and expensive in the area.
In 2009, a bottle of Krug Vintage Brut Champagne, created in 1928, was sold at an Acker Merrall &amp; Condit auction in Hong Kong. At the time, it was the most expensive bottle of Champagne ever sold at auction.
<h3>Screaming Eagle Sauvignon Blanc</h3>
Producer: Screaming Eagle
Average price: £4,610
Wine type: White
Grape: Sauvignon Blanc
Region: Oakville, USA
Although not the most expensive wine on the list, this is one of the most expensive white wines from the North Coast of the United States.
Established in 1986, Screaming Eagle is based in Napa Valley in the USA and is one of the original cult wines to be created in the area. Its higher prices stem from their low production numbers.
<h3>Domaine Leflaive, Montrachet Grand Cru</h3>
Producer: Domaine Leflaive
Average price: £12,430
Wine type: White
Grape: Chardonnay
Region: Burgundy, France
This particular domaine does sell wines that are significantly cheaper, but as these grapes are harvested from vineyards with a Grand Cru classification, therefore increases their value.
This barrel-fermented wine has a buttery and citrus flavour.
<h3>Liber Pater</h3>
Producer: Liber Pater
Average price: The 2015 variety had an average price of £27,500
Wine type: Red
Grape: Bordeaux blend
Region: Bordeaux, France
This vintage wine was created in 2015, and due to its very low production numbers and the use of grapes from ungrafted vines, that makes them some of the most expensive wines in the world.
<h3>Château d’Yquem</h3>
Producer: Château d&#8217;Yquem
Price: Sold for £75,000
Wine type: Dessert
Grape: Semillon &amp; Sauvignon Blanc
Region: Sauternes, France
A bottle of Château d’Yquem, created in 1811, was sold in 2011 at the Ritz hotel by the Antique Wine Company, rare wine experts. It was sold for £75,000 to Christian Vanneque, and at the time, the Guinness Book of World Records stated that was the most expensive standard bottle of white wine to be sold at auction.
The wine bottle is said to be on display in Mr Vanneque’s restaurant in Bali, protected by bulletproof glass.
<h3>Domaine Leroy, d&#8217;Auvenay Chevalier-Montrachet Grand Cru</h3>
Producer: Domaine d&#8217;Auvenay (part of Domaine Leroy)
Average Price: £23,439
Wine Type: White
Grape: Chardonnay
Region: Burgundy, France
Domaine d&#8217;Auvenay is owned by Lalou Bize-Leroy, making it part of Domaine Leroy. This four-acre estate, which is not solely for this particular Chardonnay, means that production numbers are small.
<h3>Egon Müller, Scharzhofberger Riesling Trockenbeerenauslese</h3>
Producer: Egon Müller
Average Price: £12,147
Wine Type: Dessert
Grape: Riesling
Region: Mosel, Germany
Based in the Saar Valley in Germany, the producer Egon Müller’s family has solely worked with the Riesling grape since their inception in 1797, creating a sweet dessert wine with citrus flavours.
<h3>Why should I invest in wine? </h3>
Wine is a great alternative to traditional investment methods like buying stocks or bonds. Expensive wines have very little connection to the global stock market and is a lot more consistent than gold and real estate.
Investing in wine also gives you a great excuse to expand your wine collection!
<h3>Your wine investment journey starts here</h3>
WineCap gives you access to the top investible wine allocations. Once we have discovered your preferences, you will have access to a vast portfolio of the most investable wines stored in secure government bonds.
We don’t charge a management fee and our brokerage charges are very low, so you have access to rare wines at a fair price.
To start your wine investment journey, <a href="https://bit.ly/36essdh" target="_blank" rel="noopener">schedule a consultation with one of our experts</a>.

Ten of the most Expensive Wines in the World

Investment in fine wine is a great investment alternative for any hobbyist and can give you a healthy return too! But if you’re a novice to wine investment, you may have a lot of questions.
This article explores the most frequently asked questions about fine wine investment to help you understand more about it.
<h3>Wine Investment FAQs</h3>
<h3>Is wine a good investment?</h3>
As an alternative to stocks and shares, fine wine investment is a pursuit that has increased in popularity over the years. The scarcity and quality of fine wine appreciates over time, as does it value. This, among other contributing factors, makes fine wine a highly sought-after asset.
With a proven stable price growth, this medium to long term investment is a great way to strengthen your investment portfolio. It’s also a great excuse for any budding wine connoisseur to expand their collection!
<h3>Which wine appreciates the most?</h3>
It can be tricky to determine which wine’s financial value will appreciate over time, as it’s not always as simple as “the more well-known wines will give you a better return on investment”. For example, the vast majority of wines produced in renowned regions, such as Burgundy and Bordeaux – perhaps surprisingly – often won’t appreciate in value. In fact, of all the wines made worldwide, only a very small percentage have potential to improve as they age, and an even smaller percentage of that group has the capacity to appreciate in value.
Looking at the previous records of appreciation for wine can give you an idea of whether it is a good investment choice or not, as can keeping abreast of current trends and demands that are influencing the marketplace.
<h3>Is wine investment profitable?</h3>
According to a (the global marketplace for wine trade), the price of prices of fine wine increased in 2021 reaching an all-time high. The fine wine market often outperforms other global stock markets, making it a profitable alternative investment option for people who wish to expand their investment portfolio.
<h3>How do you store investment-grade wine?</h3>
It is important to make sure that wine is stored correctly, if they’re not stored in the correct conditions your wine could decrease in value.
Investment-grade wines are normally stored in bonded storage. These are secure locations that have been approved by HMRC for storing items that haven’t had VAT or duty paid on them.
These optimal storage conditions also tend to increase the liquidity of fine wine, making for quicker conversions of assets into cash.
<h3>What is the risk of investing in fine wine? </h3>
Like any investment, there is always an element of risk involved. One risk with wine investment is if a critic gives a negative review on a particular wine you have invested in, demand may dwindle and the value of the wine is therefore likely to decrease.
However, wine investment is considered to be a low-risk investment. The value of wine is protected during inflation and insecure economic periods, mostly thanks to its physical tangibility as an asset.
<h3>What tax is applied to my wine investment? </h3>
Fine wine is considered a ‘wasting asset’, which means that your wine is exempt from Capital Gains Tax when it’s sold. You can be charged Inheritance Tax, which is the tax on an estate of someone who has passed away if the estate is worth over £325,000.
We recommend seeking tax advice from a professional advisor before you start investing in wine.
<h3>How much should I invest in fine wine? </h3>
There is no set rule for how much money one should invest in fine wine. Investment-grade wines are a luxury commodity; to ensure you have a wide variety of options to invest in and to get a good return on investment, most people tend to start off in the vicinity of £5,000-£10,000 to make their investments worthwhile.
However, as with any given speculative investment, you should be prepared to lose that money. It’s not advisable to make such an investment if the loss of your invested funds would debilitate your financial situation.
<h3>What are good wines to invest in now?</h3>
When you look into wines that could be good to invest in, keep an eye on wine investing news to identify trends in the market and see where the opportunities are. You should also consider working with our investment experts, who will be able to give you unbiased advice on what wines you should be investing in.
Take a look at some of our related blogs for more information:
<ul>
<li>The beginner’s guide to wine investment</li>
<li>Ten of the world’s most expensive wines</li>
<li>Is buying Bordeaux En Primeur still a good investment?</li>
</ul>
There are several things to consider when you invest in wine. One of the most important things to consider, if you are new to the industry, is whether to seek the help of a fine wine expert.
<h3>What is important when investing in wine?</h3>
WineCap can give you access to the top investable wine allocations and an extensive portfolio of investment-grade wines, as well as guide you through the steps you need to take to get the most out of your investment.
<h3>Start investing in wine today</h3>
<a href="https://bit.ly/3q5e1iG" target="_blank" rel="noopener">Schedule a consultation</a> with one of our wine investment experts to start your wine investment journey today.

Your Wine Investment Questions Answered

Bordeaux – a treasured destination for wine lovers the world over and a renowned benchmark of the fine wine market. But are Bordeaux En Primeur wines still considered a good investment?
Whether you’re a seasoned connoisseur or a budding wine investor, this article will help you decide whether investing in Bordeaux En Primeur wines is a worthy addition to your portfolio.
<h3>How buying &#8216;En Primeur&#8217; wine works</h3>
En Primeur, also called &#8216;wine futures&#8217;, is a method of purchasing newly produced wine early on before it’s even been bottled and released onto the market. En Primeur wines are usually shipped to the buyer between 18 months and three years after being bottled.
En Primeur wines are bought &#8216;In Bond&#8217; (i.e., exclusive of Duty and VAT). They are often cheaper than the future price of those wines when they become available to the open market (10%-30% cheaper, on average) because they’re being bought a good two years before the wine has been bottled, meaning they have only been reviewed and scored by a few critics.
<h3>The attraction of Bordeaux En Primeur</h3>
Buying En Primeur wine is a custom that dates back hundreds of years exclusively to the world-renowned wine region of Bordeaux, France. Indeed, it is a concept that is still highly regarded today.
It’s no secret that the Bordeaux region produces some of the world’s most prized wines. In fact, Bordeaux has been a staple in the cellars of seasoned wine collectors for centuries.
Sought-after due to their ageing potential – among other factors – buying Bordeaux En Primeur can often be the best way to secure particularly good vintages with limited availability and the strong potential to appreciate over time.
Other benefits of investing in Bordeaux En Primeur wines include:
<ul>
<li>You may be able to request a specific format for the wine, be it halves, magnums, or larger bottles.</li>
<li>When you buy En Primeur wine, you’re guaranteed provenance, given that you’re buying directly from the winery.</li>
<li>Some Bordeaux wines are simply impossible to obtain if one does not purchase them at such an early stage.</li>
</ul>
<h3>What are the risks involved with buying Bordeaux wine En Primeur?</h3>
As with any endeavour to obtain assets, investing in Bordeaux wines En Primeur is not without its risks.
First and foremost, there is no guarantee that any wines you buy En Primeur – be it the latest Bordeaux vintage or otherwise – will appreciate over time. There is, however, always the potential for your En Primeur-purchased wine to lose value over time.
What’s more, some critics of the En Primeur system say that selling wines in their youth doesn’t accommodate a proper review and rating of the vintage in question.
Further, it has been suggested that the Bordeaux negociant system is a ‘delicate’ one, as it can tend to reward buyers with a well-established purchase history, which can make the process difficult for new buyers.
<h3>Is Bordeaux En Primeur still a worthy investment?</h3>
To answer that question, let’s take a look at the investment potential of the Bordeaux 2020 vintage.
According to the Bordeaux En Primeur 2020 Report, the 2020 vintage was of excellent quality and yielded many outstanding wines. Here are some additional highlights from that report:
<ul>
<li>Production is down slightly in comparison to the 10-year average. This is largely due to hot weather affecting the grapes.</li>
</ul>
<ul>
<li>Despite disruptive factors such as the coronavirus pandemic, it is a well-priced vintage overall, though less consistent than the previous vintage.</li>
</ul>
So, is Bordeaux En Primeur still a worthy investment? Here’s what Alex Westgarth, CEO of WineCap, thinks:
&#8216;When it comes to buying Bordeaux wine En Primeur, it all depends on the vintage. Anyone considering it should be aware of the balance between quality and price in a vintage.&#8217;
In addition to those wise words, it’s also important to keep in mind that it’s still quite early to be drawing such conclusions about the Bordeaux 2020 vintage.
<h3>Talk to our wine investment experts</h3>
We can build you a bespoke wine investment portfolio based on your established goals and budget.
For reliable, expert wine investment advice, simply schedule a FREE 30-minute consultation with one of our wine investment specialists.
<a href="https://bit.ly/3IbZ6JI" target="_blank" rel="noopener">Schedule your free consultation</a>.

Is Buying Bordeaux En Primeur still a Good Investment?

Fine wine offers you a sound and lucrative investment. While traditional investors have only fairly recently discovered the tremendous opportunities available with fine wine, collectors have known about its profit-making value for hundreds of years. Through the centuries, shrewd wine lovers have been selling part of their collections as a way of subsidising their consumption, leveraging the gains of a uniquely rarifying asset against their own cellars.
Granting easy access to this highly lucrative asset, WineCap offers extensive advice from a team of seasoned experts who can help with sourcing, storage and other crucial aspects to wine investment. With the benefit of our industry-leading technology, we can help you make the most of a bespoke portfolio and reach your investment goals. 
Acting as agents, we take care of sourcing your wine and organising its storage and insurance while you remain in complete control over your investment. Thanks to our links to the UK, you’ll benefit from the most developed secondary fine wine market there is. You’ll also enjoy access to the worldwide wholesale market via the London International Vintners Exchange known as Liv-ex, allowing you to secure a fast and fruitful sale once you’ve reached your investment goals. Lastly, we feature an unparalleled global reach while being tactically positioned in London, the fine wine market’s premier hub.
Click the button below to download our Fine Wine Investment Guide and learn more about our proven strategy for investment success. Do not hesitate to get in touch and speak to one of our wine investment advisors for further information and to reserve your allocations.

Two fine wine bottles next to an oak barrel

Fine Wine Taxation | Guide

Our Bordeaux En Primeur 2019 Report is available to download. Find out what our wine investment experts thought of 2019, a wonderful vintage that saw a surprisingly successful En Primeur campaign during the global uncertainty and financial stress of the time. Discover which Bordeaux sub-regions and producers we feel delivered top class wines worth paying attention to. 
In 2019, cool weather during flowering led to reduced quantities and conditions favoured producers with multiple plots of different soil types that could handle both the sunshine and rainfall. Right Bank clay soils were better able to retain water and thus sustain the vines.
Though 2019 is undoubtedly a fantastic vintage, investors are advised to be selective and search for relative value rather than being led solely by critics’ scores. 2019 was quite different in terms of how tastings were conducted. No longer could massive trade tastings be held for the media and critics. Therefore, the tasting notes from that year may be the most careful and well-thought out of any, as the critics were not being whisked from one mass tasting to another and could taste samples at their leisure at home. Without the pressure of being in the company of the winemaker, or under the influence of peers, these may be some of the most honest ratings ever. 
Through careful study and data analysis, WineCap provides insight into the wines that we feel present both value and opportunity for capital growth. With our bespoke, industry-leading graph and analysis tools we have concluded that the wines selected in this report are attractive prospects and that any carefully built investment portfolio should consider 2019 Bordeaux.
Click the button below to download our Bordeaux En Primeur Report. Do not hesitate to get in touch and speak to one of our wine investment advisors to discuss buying wines En Primeur.

Bordeaux 2019 | Vintage Report

Fine Wine Investment | Guide

The global market for US wines has exploded in recent years, with an increasing number of previously overlooked wineries now showing investment-worthy returns. While California continues to offer the most diverse range of options, savvy investors should also look further afield to opportunities in emerging regions such as Washington.
The USA is now the largest non-European wine region for wine investors. 2020 was a watershed for American wines being considered as an investment option as a US wine featured for the very first time as one of the top ten traded wines. Screaming Eagle maintained this status in 2021. Moreover, the number of American wines trading is increasing. At the same time, spreads between buy and sell prices are shrinking: both key signs of increasing liquidity and confidence.
Consumption of wine in the USA has also increased significantly at 1bn gallons in 2020, up 750% since 2000. American consumers are also &#8211; like the rest of the world &#8211; drinking more expensive wine.
Exports have also increased, up 35% by volume since 2002 and up 140% by value, again well ahead of inflation (42% over the same period). By volume, the US is the world’s eighth largest exporter, by value the world’s sixth largest exporter. The dominance of California both domestically and internationally is startling. 
Detailed producer analysis using WineCap’s bespoke data tool revealed crucial information and key trends such as the market share for US wine, performance against similar assets and some of the highly lucrative opportunities available across a number of different and upcoming wineries.
Click the button below to download our US Wine Report. Discover top performers and why investors should consider diversifying their portfolios to include a range of American wines now more than ever before. Do not hesitate to get in touch and speak to one of our wine investment advisors to reserve your allocations.

United States | Region Report

Our Champagne Report is available to download. Find out more about one of the most important and rapidly growing sectors of the fine wine market. Representing a unique opportunity by nature of its immunity from the voices of high-powered critics, Champagne has strong brand recognition established by almost three centuries of history. 
By contrast to other sectors, culture sways Champagne’s popularity through endorsements from celebrities, royalty and elite restaurants making it challenging to track through scores alone. But we believe that prudent selection with the help of our wine investment experts, could garner promising performance.
Champagne has been enjoying a significant rise in popularity as an investment asset. Demand for Champagne has increased its overall production from 50 million bottles in the 1970s to over 300 million today. Due to its staggering consumption market, particularly due to hospitality and entertainment industry buyers, the availability of vintage Champagne is limited, further enhancing its desirability as an investment. As it ages, its quality improves; as it’s consumed, its supply decreases. This dynamic brings about an inverse supply curve &#8211; the ideal scenario for investors.
Through careful study and data analysis, WineCap has put together this Champagne report to provide insight into the wines that we feel present both value and opportunity for capital growth. With our bespoke, industry-leading graph and analysis tools we have concluded that the wines selected in this report are attractive prospects and that any carefully built investment portfolio should consider Champagne.
Click the button below to download our Champagne Report. Do not hesitate to get in touch and speak to one of our wine investment advisors to find out about this exciting category and to gain some exposure to it in your portfolio.

Champagne | Region Report

Our Bordeaux En Primeur 2018 Report is available to download. Find out what our wine investment experts thought of 2018, a vintage that promises long development times thanks to powerful tannic structures and acidity. Discover which Bordeaux sub-regions and producers we feel delivered top class wines that will perform well. 
2018 was defined by extremes of weather, with heavy rainfall earlier on followed by a hot, dry summer. Conditions favoured producers with multiple plots of different soil types that could handle both the sunshine and rainfall. Clay soils were better able to retain water and consequently sustain the vines throughout drier conditions.
Though 2018 is undoubtedly a fantastic vintage, investors are advised to be selective and search for relative value rather than being led solely by critics’ scores. 
Through careful study and data analysis, WineCap provides insight into the wines that we feel present both value and opportunity for capital growth. With our bespoke, industry-leading graph and analysis tools we have concluded that the wines selected in this report are attractive prospects and that any carefully built investment portfolio should consider 2018 Bordeaux.
Click the button below to download our Bordeaux En Primeur Report. Do not hesitate to get in touch and speak to one of our wine investment advisors to reserve your allocations.

Bordeaux 2018 | Vintage Report

Find out what investment options are out there so as not to miss out on wealth creation by holding excessive cash. That was the message from the Financial Conduct Authority (FCA) which launched <a href="https://www.ft.com/content/a8f4b690-489e-49cb-9abd-e7972cfc6b0b">a new campaign this week</a> to both incentivise and educate Britons to invest their cash wisely.
The recent emergence of user-friendly apps and free time born of the global pandemic has drawn record numbers to the market in the hope of turning their down time into financial return. However, this surge of investment opportunism has given rise to poor decision-making; with many investors tantalised by the promise of big wins from high-risk strategies such as cryptocurrency and volatile stocks. The FCA’s double-pronged campaign aims to encourage more prudent investment, while at the same time educating about the risks. The watchdog is roughly targeting a fifth of the estimated 8.6m Britons who have over £10,000 in cash.
‘Over time, [they] are at risk of having their money eroded by inflation.’ &#8211; The FCA
This recent investment activity highlights that, with interest rates as low as 0.1% at the time of writing, those looking to either start investing or diversify their portfolios would do well to take advantage of the current trend and to consider investing in wine, a proven way of delivering growth.
<h3>The benefits of wine as an investment option:</h3>
<ul data-rte-list="default">
<li>
In the last 30 years wine investment has delivered an average of 10% compounded growth
</li>
<li>
It is a tax-free investment with no Capital Gains Tax
</li>
<li>
It has a low correlation to other assets
</li>
<li>
Uniquely, wine both improves and becomes rarer with age, unlike other assets in the same class
</li>
</ul>
Based on previous performance, solid returns could be realised after five years, though customers who have held their wine investments for up to ten years or more have seen even greater returns and any potential investor should consider a long-term strategy.
Ultimately, wine is considered an excellent opportunity to grow your pot of cash in a time where interest rates cannot. With good advice and the right selection, wine could be the best investment option you add to your portfolio this year.
Find out more by downloading <a href="https://bit.ly/34cbmfo" target="_blank" rel="noopener">our free guide</a> to wine investment.

Investment Options: Why Wine?

Italian wine is increasingly becoming hot property when it comes to wine investment. Last year was one of the category’s strongest when it came to trades, with an increase of 7%. Tuscany also performed remarkably well and, because of this, we have put together a list of Tuscan wines that are highly respected, built to age for years and that are leading the charge when it comes to investment grade wine.
The classic ‘Super Tuscans’ &#8211; including producers such as Solaia, Ornellaia and Tignanello (all having increased in trades in 2020 by 15%, 10% and 9% respectively) – began making incredible wines in the 1960s and 70s. These producers created standout wines using Bordeaux grape varieties and paved the way for others who are now gaining more and more recognition using other grape varieties, including Sangiovese.
Tua Rita is widely regarded as the producer who spearheaded the second wave of Super Tuscans, with its flagship wine Redigaffi. Like some of the greatest things in life, Redigaffi was created entirely by accident. In 1984, Rita Tua and her husband Virgilio moved to the quiet Etruscan coast to retire and cultivate wines for fun. Years later, and with 30 hectares of Merlot under vine, Redigaffi is now considered one of Tuscany&#8217;s finest wines that commands respect. This wine continues to gain momentum and we believe it would make an excellent investment option for those wanting to diversify their portfolio.
Second on our list of Tuscan wines is the top-flight Chianti producer Fontodi. Keeping a steady hand on the tiller at the Fontodi estate are Marco and Giovanni Manetti who have been making its predominantly Sangiovese-based wines since 1979. Their vision, expertise and commitment to quality continue to reap rewards: Fontodi’s Flaccionella della Pieve 2017 was one of last year’s top ten most-traded Tuscan wines &amp; in the top 15 most-traded Italian wines. It represents a great diversification into a wine investment category that&#8217;s accelerated in the past 12 months.
Biondi Santi is one of the old, traditional Tuscan wine estates whose pioneering work propagating the Biondi Santi Brunello di Montalcino clone of Sangiovese cemented it as one of the region’s legendary producers. As perhaps the greatest expression of Brunello di Montalcino, this 100% Sangiovese wine aged for at least 36 months in oak is built to last for decades, if not longer. With the Riserva 2012 having all three ingredients that we would expect to appreciate: a historic brand, immense ageing potential and one of their highest ever scores – 97 points – it offers excellent value compared to top tier wines from other regions.
If you want to find out more about investing in Italian wines &#8211; and the growing Tuscan category in particular – <a href="https://bit.ly/3CDOpid" target="_blank" rel="noopener">schedule a free consultation</a> with one of our investment experts.

Our Top List of Tuscan Wines for Investment

A great deal can and has been written about how to structure a wine investment portfolio. Just Googling &#8216;Modern Portfolio Theory&#8217;, &#8216;Post-Modern Portfolio Theory&#8217;, or the &#8216;Efficient Market Hypothesis&#8217; makes it clear that a few hundred words can only scratch the surface.
At times we may recommend – or clients may wish for greater exposure – to a particular sector. However, the common belief is that the best practice is to hold a good spread of assets and a good spread of asset classes. One of the (many) advantages wine has to investors is its relative simplicity and that it lends itself to fairly easy portfolio structuring.
<h2>Here are some things to consider when thinking about how to structure a wine portfolio: </h2>
<ul data-rte-list="default">
<li>
Know your goals &amp; understand your timescales. You want to be able to take as much advantage as possible of wines&#8217; ability to improve as it ages. As attractive as we think 2019 Bordeaux is, if you’re looking at a short hold it might not make sense to invest in En Primeur wine if its drinking window may not line up with your timescale.
</li>
<li>
Understand the veil of ignorance. While predictions can be useful, the future cannot be certain. Unless you have a functioning crystal ball, it&#8217;s good to have a reasonably broad selection. Hold a spread of regions, vintages and price points, but also keep an eye on holding varying formats too.
</li>
<li>
Don&#8217;t focus solely on the highest pinnacles when considering how to structure your wine investment portfolio. Oftentimes it is less heralded wines or vintages that outperform the market. Naturally, you’ll want to hold some tip-top wine, but make space for the less than stellar and perhaps even the objectively bad vintages. If you’re looking at well-priced examples of the best brands, there&#8217;s no reason to avoid off vintages on principle, Lafite 2007 and 2013 being great examples.
</li>
<li>
Have some flexibility. When building a portfolio we always have half an eye on the current shape of the wine market but it&#8217;s easy to be overly focused on sticking rigidly to a planned portfolio structure. Will it make a difference to your portfolio if you’re at 20% Burgundy or 25%? Probably a bit, but it is not going to be night and day.
</li>
</ul>
It&#8217;s hard to know exactly what different sectors of the wine market will do in the next 12-24 months, but if you do your research and ensure broad holdings you can structure your portfolio for long-term stable growth. Want to talk to one of our experts about creating a wine investment portfolio in more detail? <a href="https://winecap.com/schedule-a-call" target="_blank" rel="noopener">Schedule a call here</a>.

How to Structure a Wine Investment Portfolio

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Are you considering investing in wine and want to know how wine investment works? Congratulations, you are just one of the growing number of people who know that fine wine is a top performing alternative investment. Inflation hit 7% in April 2022 in the UK according to the Office for National Statistics (ONS). And it says it’s set to increase. Any serious investor should consider fine wine as an investment.



<h2>So, how does wine investment work? Here’s our recommendations:</h2>



-Buy with a medium to long-term view. Wine investment’s central idea is that it is an improving asset in diminishing supply. As time passes and the wines become rarer, they will be harder to find. This is why it’s always wise to enter the market with the intention of holding wines for a minimum of five years.



-Choose how much you want to invest and then diversify your wine investment portfolio. Select wines from different countries and regions for a balanced portfolio. We’d advise starting with traditional and well-established regions, such as Bordeaux. Many seasoned wine investors add a range of wines from different countries to their portfolios to create a spread.



-Make sure your wines are stored professionally. Perfect provenance of fine wine secures its value and desirability and is absolutely critical when investing or selling. A wine’s authenticity must be documented and assurance of proper storage should be available. WineCap stores all its wines in government bonded warehouses.



-Be in the know about fees. Some brokers charge an annual fee that’s known as a management fee to handle your portfolio. We pride ourselves on not charging one and also having the lowest brokerage rates.



-Prepare your exit strategy. When the time comes to sell your investment, there are a number of avenues you can go down. As your investment broker, we would advise you on the best route to take based on your wine’s position on the market at the time. Options include selling to wholesalers, private sales and auction houses.



Ready to start investing in wine? Find out more by <a href="https://bit.ly/3pDkP6V" target="_blank" rel="noopener">downloading our free guide</a>.

Two men drinking wine and looking at a laptop

How does Wine Investment Work?

Asian buyers now make up 65% of the total wine and spirits buyers in the world. That’s according to <a href="https://www.sothebys.com/sothebys-2020-wine-market-report.pdf" target="_blank" rel="noopener">Sotheby’s 2020 Wine Market Report.</a> Asia’s demand for the world’s finest wines looks set to grow too, as 2020 was the second highest percentage on record for Asian buyers, after 68% in 2019.
There are multiple factors that can be attributed to Asia’s growing market share of the total wine and spirits market. The Coronavirus pandemic had a direct impact on drinking habits last year. Unable to visit restaurants and bars, China’s wealthy citizens began opening bottles of some of the finest wines from their cellars at home.





An international travel ban and lockdowns across China also meant that those who usually would have travelled abroad on holiday, opted instead to spend their money on buying top wines such as Domaine de la Romanée-Conti: a producer that represented 20% of all wine sales at Sotheby’s last year. However, while Bordeaux and Burgundy producers still make up the top ten names in Sotheby’s annual producer rankings, Asian buyers are looking further afield to regions such as Napa, in order to discover new wines such as Harlan Estate, Sine Qua Non and Colgin Cellars.



The future for wine imports into Asia, particularly into China, looks very promising. 2.25m nine-litre cases were imported into China in 2006 compared with a colossal 50.5m cases in 2019. Although there was a slight drop in the number of cases imported in the past two years, the trend for increased wine consumption looks set to continue. This is due to a combination of wine enthusiasts having opened bottles from their cellars during lockdown, as well as the disruption caused to supply chains to mainland China by the Hong Kong riots having ended.



As more and more Chinese cities open up &#8211; such as Shanghai &#8211; on-trade sales of fine wine are beginning to blossom, as consumers celebrate the easing of lockdown restrictions. With such strong figures from Sotheby’s recent report, all eyes remain firmly fixed on Asia with big expectations for this wine market that shows huge potential for growth.

Asian lady selecting a bottle of wine from her cellar

Asian Buyers make up 65% of the World’s Total Drinks Buyers

Investing in wine used to be intimidating. It was also considered only for the rich. Fortunately, things have changed. Wine investment is available to everyone and anyone who is looking for a stable alternative investment. It has &#8211; and continues to &#8211; deliver consistent returns. The category went up +13% from June 2020 to June 2021, according to the <a href="https://www.knightfrank.com/research/article/2021-06-28-luxury-investments-past-present-and-future" target="_blank" rel="noreferrer noopener">Knight Frank Luxury Investment Index</a>. What’s more, only a modest amount of up-front funds are required to begin building your portfolio. While we always recommend speaking to one of our investment experts before getting started, fine wine is considered to hold fewer risks and more advantageous gains than nearly any other financial or alternative asset category.



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<h2>Our Top Five Reasons to Invest in Wine</h2>



One: Fine wine has a low correlation with gold, oil and global financial markets. It has delivered consistent compounded growth of 10% over the last 30 years. By diversifying your overall investment portfolio with wine, you could add a safe investment that could bring stability and profits, regardless of the economic climate.
Two: It’s a tax-free investment with no Capital Gains Tax. Those who leave their cash in UK bank accounts will see their money eroded over time by inflation. Inflation is currently running at 4% in the UK at the time of writing and those wanting to make the most of their savings should seriously consider taking advantage of the tangible investment options out there.
Three: Fine wine is an improving asset in diminishing supply. The more corks that are pulled over time, the rarer the wine is and therefore the harder to find.
Four: Investing in wine is best when held for a mid to long-term investment period. The longer wines are held, the more opportunity you could have for higher returns.
Five: Perfect provenance of fine wine secures its value and desirability and is absolutely critical when investing or selling. Provenance is 100% guaranteed when you buy from us. All our wines are professionally stored in government bonded warehousing.



Find out how to get started investing in wine: download our <a href="https://bit.ly/34GkZmR" target="_blank" rel="noopener">free guide</a> or contact us.

Can you Invest in Wine?

Lucie &amp; Auguste Lignier, Gevrey Chambertin Aux Combottes

+350%-10 year return

“I have always been impressed by their professionalism and their competitive pricing. I have trust and confidence in WineCap”

Rod|Valued long term client

&#8220;I am a new investor to the wine industry and in Martin and WineCap I found an informative and exciting guide&#8221;

Tamara|New wine investor

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Wine is part of a group of investments collectively known as ‘treasure assets’. These include things like art, jewellery, antiques, watches, antiquities, toys and classic cars. Those considering investing in wine as part of their wider portfolio often do so in the context of these other treasure assets, so it&#8217;s worth understanding the similarities and differences. While we wouldn&#8217;t want to discourage anyone from investing in other sectors, these differences illustrate why we think wine is the best option for most investors when it comes to treasure assets.



<h2 class="wc-sub-header-text">Investing in wine: its similarities to other asset classes</h2>



Product homogeneity: a homogenous product is one that cannot be distinguished from another and that can be easily substituted. While wine isn&#8217;t perfectly homogenous, it&#8217;s certainly close. As far as the market is concerned, one case is essentially the same as any other. It’s a different situation with most other treasure assets. The value of one Monet painting will tell you relatively little about the price another will fetch. Even with industrially manufactured products such as classic cars, their condition, mileage and service history can have an outsized impact on pricing and desirability.
Established storage and logistics: while it’s increasingly common for art to be stored in free ports and for classic cars to be kept in professional storage facilities, wine still has an advantage here. There is a long-established global network of affordable wine storage facilities that ensure a wine’s provenance is documented, as well as keeping it in top condition. Should the owner wish to stop investing in wine and drink it, final mile delivery can easily be arranged.
An established marketplace and data: in 2021, data on the performance of wine as a collective and on individual wines is relatively easy to obtain and to track. Thanks to product homogeneity, WineCap is able to provide valuations quickly and easily, allowing investors to know at any point, exactly what their wines are worth. Wine also has well-established marketplaces and a relatively low transaction cost. In comparison, art is usually sold at auction houses which command high fees, 20-30% is not unusual once all costs are considered, or in galleries where markups can be 50% or more. Costs to use online wine trading platforms or merchants such as WineCap are significantly lower.
Low cost: when compared with other treasure assets, even investing in wines that are at the top-end is somewhat affordable. This is one of the reasons why prices are generally robust and unaffected by the global economic climate. Imagine someone who regularly buys investment-grade wine; a financial crash might put them off buying a £20m Ferrari 250 GT LWB California Spider, but will it deter them from taking up their annual allocation of £15,000 Domaine de la Romanée-Conti?
Low cost of ownership: a Ferrari F40 has to have its fuel cells replaced every ten years and the parts alone for that one item could run to £30,000. If the batteries in your Mclaren P1 need replacing, that&#8217;s £100,000. A case of wine, regardless of value, shouldn&#8217;t cost more than around £15 a year to keep in perfect condition.
An improving asset in diminishing supply: there’s no other asset in this class that both improves and becomes rarer with age. This advantage is unique to fine wine.



Above all, the argument for wine is fundamentally one of investment returns. The graphs above show that, over the long-term, wine has comprehensively outperformed both the treasure assets it is most similar to, as well as more mainstream assets. We believe there is a place for investing in wine in any portfolio.
Want to find out more? <a href="https://bit.ly/3Jc66YA" target="_blank" rel="noopener">Schedule a free consultation</a> with one of our wine investment experts.

How does Investing in Wine Compare to Similar Asset Classes?

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<h2 class="wc-header-text">Investing in wine is more straightforward now we have a deal</h2>



Ever since the UK voted to leave the European Union in 2016, trade talks and negotiations between the two sides had been full of uncertainty, posturing and brinkmanship which at times made it feel like a deal was unobtainable. So, the news that a trade deal – now ratified by the UK Parliament &#8211; had been struck on Christmas Eve in 2020 was met with welcome relief across all industry sectors on both sides of the Channel and especially by those looking to invest in wine.
1. The costly VI-1 import documentation for UK and EU wines is no longer going to be introduced in July as previously planned. Taking its place will be a straightforward Wine Import Certificate which asks for basic producer and product information. This means far less admin and fees for wine importers, which in turn means no extra costs will be passed on to customers.
2. Crucially, wines will not have to undergo lab assessment for the new Wine Import Certificate. Submitting wines for lab analysis would have caused backlogs of wines which would have created frustrating shipment delays.
3. While UK wine importers are going to have to get to grips with new processes and forms over the coming months, this is just part of the anticipated bedding-in period which will become second nature as time goes on and as new processes are established.
With the previous uncertainty around Brexit having disappeared with the end of the transition period and with the years to come looking as though they&#8217;ll mirror previous years of healthy returns for fine wine, <a href="https://bit.ly/36iWRqL" target="_blank" rel="noopener">contact us</a> to speak to one of our advisors about creating your portfolio to invest in wine.

Invest in Wine with Confidence now that we have a Brexit Deal

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The Bordeaux En Primeur 2020 campaign is well underway and the general consensus from the trade and from critics is that this is an excellent vintage, the third in a row:
‘We have a reputation in Bordeaux to say the last vintage is the best one. But we did with 2018, 2019 and now 2020… after we did our tastings in the spring I can say it is a really great vintage. It is different from 2019 with more freshness, more tension, more balance. It’s a good one. Maybe a bit less powerful than 2019 but it made really great wine. I think that we can call it a trilogy now (three consecutive high quality vintages: 2018, 2019 and 2020).’ &#8211; Michel Rolland in conversation with James Suckling
Ahead of the Bordeaux En Primeur 2020 campaign, we’ve all been expectantly waiting to see how this year’s prices compare to 2019’s, as last year’s prices were considerably lower than previous years, due in part to the ongoing global pandemic that caused significant disruption, especially when it came to mass tastings being cancelled. Initial releases have come in either at the same price as last year or slightly higher. Increased prices are due largely to volumes being down some 25% on the year before.
The quality of the vintage has been declared as very good to excellent and the wines that have been released so far have commanded varying scores that range all the way from very good to 100 points.
As Jane Anson writes in Decanter: ‘Bordeaux 2020 is a year of contrasts, so it favoured terroirs that are best able to cope with the changes – and winemakers who were able to follow closely and help their vines adapt.’ There are some stunning wines being released and those who have done their research will reap the benefits. For expert advice, <a href="https://winecap.com/schedule-a-call" target="_blank" rel="noopener">schedule a call</a> with one of our investment analysts.
Interested in reading the Bordeaux En Primeur 2020 report in full? <a href="https://winecap.com/learn/bordeaux-en-primeur-2020" target="_blank" rel="noopener">Access it here</a>.







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