If you’re looking for a crisis-proof investment that’s practically easy to do, red wines happen to retain not only good taste, but also good money as time goes on.
Wine as part of drinking habits is now inseparable to those growing countries in Asia. The better economy proves that more palates demand higher quality, taste and, ultimately, brands. And this is where exactly fine wine investment chips in… Bottling up big profit in the disguise – or real facets sometimes – of all the three elements above mentioned are a trend that will strive strong and continue to spread here in Asia and, of course, Indonesia.
But how big is the profit, really? Consider this: a top 2008 Bordeaux bottle as in the likes of 1855 classification can fetch an astronomical pricing fold of 500% in less than 2 years’ time. Such case will never come to exist for any banking investment. Better yet, that red wine can still go from strong to strong as it ages. Will the price ever drop? Maybe, but not to the extent of overshadowing the profit. Sounds promising? You bet.
There are common facts prevailing over fine wine investment. One has to understand that red wine dominates as much as 90% of the circulation. Those of Bordeaux especially are never dim to shine in the market and reach more favourable pricing rates. While wine remains to be the commodity, two distinct types of fine wine investment are the wine future and the wine bottles.
The first is about thumbing your money to pre-sale wine. The wine future usually attracts more of professional fine wine investors who happen to have quite a considerable amount of experience in the industry. Close ties with wine producers are definitely necessary in order for you to get the “sneak peak” or sample the pre-sale wine – which is usually still accommodated in barrels – and decide how much you want to put down. This also means frequent travels to France will occur, so is speaking in French.
Beginners in fine wine investment, however, often start with trading reputable bottles for the sake of profit. This takes both an ear akin to any updates on wine scores and a considerable amount of money to purchase the bottles. The wine scores in this case are those standards set on wine brands by serious wine critics, such as Robert Parker, Jancis Robinson, James Suckling and editors of Wine Spectator and Decanter magazines. You can later on strike a deal with local importers to bring in some highly-scored Bordeaux bottles straight from France and keep them safe until the pricing rate rises high. As simple as that.
Taste and other liabilities
What makes the price go stronger, people often ask. In fine wine investment, it’s rarely a matter of taste – no, save that for a wine tasting session. The more expensive bottles don’t necessarily promise a more mellow flavour to the palate. Even when a wine bottle develops a rather dislikeable quality as it matures, the buyers will still gulp and feel good about it. After all, whenever money is involved, it’s always better to keep personal preferences aside.
Brands and the bottle condition regularly become the main considerations instead. Red wines with fine markings such as Grand Cru Classé – reflecting a superior class of terroir or plantation land – sell higher than the average. The way you store the wines though can damage the price to a variable extent. That’s where major efforts are required in this lucrative business.
Most wines reach their peak of maturity within the first five years after production. But keeping wines in fine fettle for over a year on your own is certainly costly. You could build your own wine cellar or buy a premium fridge which offers wine racks, provided that the electricity and the temperature stay steady throughout the year. Otherwise, it’s always recommended to approach a wine bank to take over and let you rest easy.
In Jakarta, Danisa Texindo at Bendungan Hilir area is among the first wine importers which provide the service. “The wine bank is the place you put your wine safely and it can give you a better value when people know where and how you keep your wines,” explains Alexander H. Effendie, the co-founder of Danisa Texindo and now the recipient of the Commanderie de Bontemps title directly from Bordeaux. The client may also opt for the bottles to be kept – and insured – in the wine bank in Jakarta or Singapore, in case an international market is involved. As a matter of fact, China, India and ASEAN countries are now in the top tier of fine wine market, willing and able to spend more on opulent wines. That said, why not keep a bottle or two starting from now?
By Chris Andre. Published in HighEnd Mag, August 2011.