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Bordeaux 2016

 

“With a valuation at 14.75% return on investment before the wine is bottled, this has exceeded our client's expectation.”

Aim


Client B is someone interested in wine but also curious in diversifying his investment portfolio and very interested in the advantages of buying Fine Wines. In fact, Client B with 2 friends have invested £5,000 each, to give them more buying power going to the market. Client B was happy with anything from 6% to 7.5% return on investment.

Strategy


In this case, due to the time of year (June 2017) and the size of the investment we recommended our client to take opportunity of the wonderful 2016 Bordeaux vintage. The sceptical will say that some of the prices had increased significantly, that might be so but this is just not another good vintage but a formidable quality at still relatively reasonable prices compared to the hike one saw in 2009 & 2010 vintage. Furthermore, our policy to provide our client with the ability to buy from source, enables us to provide the best price on the market for any particular wine we can get access to.

Wine Investment

Bordeaux from 2016 bought 'en primeur'.

 
 

Conclusion

Bordeaux 2016 in this case has not yet been bottled, although will be released onto the market in spring 2019. We don’t usually value wines that have not yet been bottled due to the little movement on the trading place. The “canny Bordelais” will only release a certain amount of wine onto the market during the “en primeur*” campaign making further releases at a later stage albeit at a higher premium. With a valuation at 14.75% return on investment before the wine is bottled,  this has exceeded our client's expectation. This example highlights the benefit of buying at source when the wine is released. This balanced portfolio of wines will provide Client B with an excellent avenue for investment over 10 to 15 years with good returns and low risk as well as providing an alternative to more traditional forms of investment.

*En Primeur is the release of the latest vintage from Bordeaux (in this case, 2016). Wines are released for sale while still in the barrel, with bottling and delivery to the physical market two years later. For this reason, many also call this buying ‘wine futures’. Historically, estates will release the vintage at its lowest price so consumers are rewarded for purchasing early; often this is the best opportunity for shorter-term gains.

 

Valuations are done using a cross section of platforms such as Wine Searcher pro, Live ex and Wine Owner as well as referencing with specialist wine data analysts Wine Lister.