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Luke Batchelar, of Batchelar Fine and Rare Wine, a wine sourcing and cellaring consultancy, answers queries about wine investment.
Is wine collecting a safe investment?
There is a degree of risk, which is reduced through knowledge, research, proper cellaring and buying at the right price. You need to deal with established and reputable merchants and traders because the industry is largely unregulated.
How much should someone invest and what sort of returns can you expect?
Across a balanced portfolio of equities, property, cash and bonds, collectibles such as fine wine and art can offer diversity and balanced risk return at about 3-5 per cent of a client's investment portfolio. There are indices that follow fine wine trading activity, most notably the Bordeaux trading indices. These include all "investment grade wines" that have a long trading history. These indices have tracked at 8-12 per cent year-on-year for the past decade or so.
Are there any "safe" wine varieties that steadily increase in value?
Certain regions and particular chateaux, domains and estates are regarded as investment-grade wines. Classified Bordeaux, grand cru Burgundy, vintage and prestige Champagne and vintage port have been the traditional markets. There are a few "new world cult wines", generally from Australia and the US, that have become hugely sought-after and their prices have jumped considerably. On the whole, investment-grade wines are long- living red wines - but there are a few whites, notably sweet wines of Sauternes in Bordeaux and Chateau d'Yquem.
What's the best way to start a wine collection of my own?
There is a difference between wine collecting and investing in wine, so you must have a different strategy. If you would like to use wine as an investment vehicle, then I would enlist the support of an experienced and knowledgeable wine merchant. If you are collecting to mature the wines for drinking, start buying at a level you can afford, be it by the bottle or by the case.
Is wine investing as high brow and exclusive as some might expect?
Across Europe and North America in particular, and now in Australia, wine collecting for investment purposes has become more mainstream.
Should I be looking overseas for bottles to add to my collection?
Generally yes, but fine wine is about rarity so we should not exclude New Zealand wines. Twice in the past three years Kiwi pinot noirs have won the International Wine Challenge's best pinot noir world titles.
