WINE USED TO BE something you drank, right? Well, not anymore, at least not exclusively. Wine has become a serious investment commodity, increasingly so in the past decade. More than ever wine has the capacity to appreciate in value, to the point where the current value of certain wines can far exceed their original purchase prices. Moreover, according to a joint paper by professors from Cambridge, Vanderbilt and HEC in Paris, wine as an investment outperforms such investments as government bonds, art and stamps. Not surprisingly, therefore, global wine auction sales more than doubled from 2005 to 2015, increasing from $165 million to almost $350 million in 2015. On top of that wine even has its own trading exchange—the London International Vintners Exchange, or Liv-ex, founded in 1999 in London and now doing over $100 million annually in trades.
So when presented with a wine collection how do you determine whether it constitutes an investment grade asset or is merely a very nice, but not especially valuable, collection of wines? There are several governing factors, such as the region from where it comes, the winery that produced it, the vintage from which it was bottled, and the conditions under which it was stored. An American Appraisal Association certified appraiser—one compliant with Uniform Standards of Professional Appraisal Practice—who also possesses high level wine credentials and experience can most definitely evaluate the situation and provide the assistance necessary. Email me at nkaplan@corkcounsel.com for more information.