Wine Is An Asset, Whether You Like It Or Not

The Fairy of the Vine

People say to me, "I don’t believe in fine wine investing."

As if I’d asked them to believe in some fairy that magically transforms wine from barrel to bottle.

BIDIBIDOBIDIBOO

Fine wine probably makes up about 10% of total wine production. Not an exact figure, but close enough. The majority of wine is made for immediate or near-immediate consumption, so when people say they don’t believe in fine wine investing, they’re right—about 90% of the time.

But then, those same people enjoy drinking, say, a 2010 Barolo. They value the time that’s passed—at least the first four years when the wine was ageing in the producer’s cellar.

But somehow, they think the price of that wine should magically stay the same for the next decade. Storing one, ten, or a thousand bottles isn’t free—it costs about £1 per bottle per year. If storage was free, why wouldn’t producers just keep the wine and release it when it’s perfectly ready to drink?

The reality is, storing and ageing wine comes with real costs.

So, who should bear this cost?
The producer?
The merchant?
The collector?
Or should we just drink wine straight from the barrel?

Maybe next time you want a glass of claret, you should hop on the first EasyJet flight to Bordeaux, drive to Figeac, knock on the door, and ask to drink directly from a barrel of 2023 while Frédéric Faye watches. Then, when you’re done, just wave goodbye and head home.

What a waste of those beautiful Figeac labels too. But unnecessary, right?

Because after the wine is made, everything else—marketing, storage, ageing, shipping—is just business, just costs. But someone took the risk, and someone had to pay for them.

The reality is, when dealing with an agricultural product like wine, there’s this idea that the hard work stops at production, and everything after that is just adding unnecessary costs.

Wine doesn't age itself magically, and what’s the point of making a wine that can age, if we don’t actually age it?

Investors, collectors, and people who buy wine En Primeur are essentially financing the châteaux. Without the EP system, châteaux would need to go to a bank and borrow all the costs to grow and make that wine against, say, a 10% interest rate until the wine is ready to be sold.

Some can survive without it, but many cannot.

The truth is, without fine wine investors, many of these wines wouldn’t see their full potential.

It’s this magical thinking—that wine is some ethereal good given to us by the gods—that’s holding the wine industry back from having real services.

Moving a bottle from one warehouse to another takes 2-3 weeks! And the two warehouses are in the same London City Bond! It costs £11. In 2024.

Explain that to a Gen Z.

We don’t treat wine like the asset it is, we don’t recognise the need for real services around it, and, worst of all, we still think of it as just a hobby.

Wine is an asset.

And assets are bought and sold.

And that’s trading.

If it makes you feel better, call it collecting.

Call it storing.

Call it cellar management.

Call it whatever you like.

I’ll call it by its name: fine wine investing.

If the wine industry doesn’t start recognising that wine is an asset—if we don’t realise younger generations aren’t interested in cheap, quick-drink wines, and that yes, investors do love drinking wine but also need it to make financial sense—then we’re just waiting for that fairy to come and save us all from nonsensical pricing and beyond.

Sara Danese

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