LIQUID GOLD?
Assembling a collection of fine wine certainly seems like a glamorous way of storing your wealth, but does it really make sense as a hard-headed investment? JON WALL asks the experts
Tam recalls a meeting he had with a prominent wine client when he first joined an auction house more than 10 years ago. “I asked quite innocently, ‘Why do you invest in wine?’” To Tam’s surprise, the client just laughed and said, “I don’t really invest in wine. I love wine, I love drinking it and I love learning about it.”
Even given such a degree of passion, individuals who are considering devoting considerable sums of money towards the accumulation of an investment-quality wine collection should be aware of several caveats before they even start. There is, rather obviously, the fact that wine is a commodity that can change over time – to its benefit as well as to its detriment – and that, however good and worthy of laying down for three, four or five decades or more it may be, at some point it’s likely to reach a peak of flavour and complexity, after which it will probably deteriorate. There’s even the very simple issue – as Tam demonstrates by waving a cork – of the material most commonly used to plug premium bottles, poor examples of which can help “cook” or otherwise taint even the finest wines.
Bottle breakages don’t even bear thinking about, but they can happen too.
So you need to take care of your wine, which in the vast majority of cases means proper, ie professional, storage in a darkened space where a constant temperature of around
12-14 degrees and humidity of around 70 percent are maintained, and which should preferably be vibration-free – and storage such as that is unlikely to be cheap. “Too hot, too cold or too dry will do harm to the wine,” says Chan. Unlike rare coins, jewellery or watches, cases of wine take up considerable space, a factor that not only directly influences storage costs, but also the expense of shipping the wine from wherever you bought it (which is likely to be Europe or the United States) to the place that you intend to keep it.
“If you’re buying wine to be consumed within three to six months,” says Chan, “it’s OK to keep it in your home, though you should have a wine fridge. It would be even better if you had a basement, but in Hong Kong that’s unlikely! For long-term storage, say years, you really need a professional cellar, and that could be quite expensive. There are lots of private storage spaces for wine in Hong Kong, but the rent can be up to $50,000 a year for 50 square feet, which would house around 100 cases.
“Loose bottles are fine for short-term storage for your own consumption,” she adds, “but if you’re going to store the wine for years then I’d strongly recommend the original wooden cases.”
In an age and culture when apparently anything and everything can be faked, provenance is another issue that must be taken into account (though establishing a wine’s history isn’t solely concerned with whether or not it’s the real thing, but also if it’s been properly stored). Are you sure that case of
1998 Château Lafite Rothschild you just shelled out a small fortune on isn’t some cheap plonk that’s been rebottled? Well, if you’ve obtained it through the proper channels – which generally means from a reputable auction house – you can be fairly sure it is. Any self-respecting auction house has its reputation to consider, so it will exhaustively research the history of the wines it’s offered – where and when they were bought, how they were stored, etc – and even sometimes taste them before agreeing to sell them.
As to the kind of wines that are likely to make good investments, the list is actually rather limited. “I would go for French wines,” says Chan, “wines from Burgundy, Bordeaux, Champagne and the Rhône Valley. Outside of France, you can consider top Italians and California wines.
“Of course you have to consider the vintage, too. The better vintages can last longer. Take, for example, [Bordeaux] 1993, which is not a very good vintage. If you bought, say, 20 cases, these are already past their peak and if you try to resell them now they won’t be worth as much. But in any case I’d suggest not focussing on a single vintage: your collection should spread out by decade. Even if you know that 2010 is considered a