Spirit of the Times

Have you lost your shirt in the stock market? In the last few years, have your investments in real estate been heading south? Is there anything else out there that you can put your money into and see it rise? Well, if you are prepared to think out of the box, there is the possibility of investing in wine. Someone will hold your bottles for you in a suburb of London for right number of years and, hopefully, you will be able to sell the bottles at a profit.

Also, the more the wine of a particular vintage is drunk, the rarer the remaining bottles become. Therefore the prices of these remaining bottles will rise. At least in theory. The added advantage is that fine wines, properly stored, will improve in taste. But if you are hoping that the Chilean bottle you bought from your bootlegger for Rs 700 will fetch you more in later years you should stop reading right here. Not all wines improve with age. The cheaper ones most certainly don’t. They will go bad if kept too long and will develop a closer relationship to vinegar than to wine. Most of us wisely buy bottles for drinking within the next month or so.

A select few see investment opportunities in wine. They may not have ever bought wine anywhere close to their lips for religious or other reasons but are discovering its benefits as investments. But you have to be in it for the long run. It takes years for fine wines to improve in quality and price.

Unless you know a thing or two about wine, it would be financially suicidal to attempt wine investment without advice from experts. It is a bit like investing in art—what looks attractive to you may be rubbish to connoisseurs.

If you are looking for an expert who can advise on investing in wine there is Cecilia Oldne, who was previously with Sula Vineyards, a Swede who now lives in Mumbai. She is a partner in the London-based Amphora Portfolio Management. A qualified sommelier, she knows a thing or two about wine, having been in this line of business since 2003. Amphora is exclusively into investment in wine; it is not a company that sells wine—neither wholesale nor retail. Its sole interest is in helping you invest in wine, a sort of a wine stockbroker. The company can build a special portfolio of investment grade wines. Given the high Customs duty and the storage challenges in India, the investor’s wine is stocked in London in the owner’s name in an insured and climate-controlled warehouse. When the wine matures to the desired level Amphora helps the client sell their holdings, hopefully at a higher price.

Amphora was started by David Jackson after the collapse of the stock market in 2008 as an alternative form of investment. His interest in Indian investors began soon afterwards. The company specialises in fine wines of the Bordeaux and Burgundy regions in France. Like all business propositions, there are always risks involved, regardless of what anyone tells you.

According to Reva K Singh, editor of Sommelier India, the country’s leading wine magazine, the transformation of wine from an enjoyable pastime to a serious investment possibility began in the mid-1980s. “But investing in wine can be volatile. It moves with the economy and fads. Provenance, authenticity and condition are critically important for a valuable collection to maintain its value,’’ she warns, “Bordeaux prices have fallen since 2011.”

Wine investments can be in barrels as well in bottles. Wine that has been kept in oak barrels absorb some of the flavours of the oak. Often these barrels have been previously used to store spirits that too leave a lasting impression on the stored wine. Wine can also mature in bottles. Unlike spirits, wine can improve in taste after bottling. Bottled wine needs to be stored properly or it will deteriorate and eventually be more vinegar than wine. Three factors can have a positive effect on wine in a bottle: temperature, light and humidity. The point of ageing wine in a bottle is that it can develop complexity of aromas, flavours and change in texture in a way that can’t be mimicked. Amphora only advises on fine wines that are already bottled, with no interest in wine in bottles.

Last year, a bottle of wine was sold for $304,375 at an auction in London. It was the most expensive single bottle of wine ever sold. The Cheval Blanc of 1947 vintage is considered by many to be the finest wine of the century. This doesn’t happen every day.

You can also buy rare wines and stock them for your own drinking pleasure. You need a good temperature-controlled cellar for that. Indian weather conditions in the plains play havoc with wine. Maturing wine takes time. You have to be in it for the long run. It is important to keep your bottles in a cool, dry place. But that’s easier said than done in a country like ours. Even the winters are hot outside the northern regions.

Unless you know a thing or two about wine, it would be financially suicidal to attempt wine investment without advice from experts. It is a bit like investing in art—what looks attractive to you may be rubbish to connoisseurs

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Unfortunately, your wine will spoil in heat and fluctuating temperatures. Delhi’s liquor shops are like furnaces in summer and I can only imagine the quality of the stock they carry.

And the government-owned shops haven’t yet learnt how to keep wine properly on shelves.

The basement of your house is perhaps the best place for wine. The optimum temperature is 10-12 degrees Celsius but a slow change in the range of 5-18 degrees between summer and winter months is not a problem. While screw-cap bottles can be kept standing up, wines with traditional corks should be stored on their sides so that the cork remains moist. If it dries out, the bottle will be in trouble—air will enter it and oxidise the wine. The word ‘oxidise’ is bandied about a lot in the liquor trade. What does it mean? Simply that the wine will combine with oxygen and that is not good for the wine. Most wines will stay drinkable for a few days once opened. But the best place for them, even red ones, is the fridge.

Whiskey too can be an investment possibility but for that you will have to look abroad for advice. There are two ways of doing it. The first is to buy bottles of rare single-malt whiskies in a shop or at an auction and hope its price will rise. It can’t be done in India since our shops don’t stock investment-quality spirits and it would probably be illegal to auction them here. London is recommended by some experts.

The second possibility is to invest in whiskey that is still in barrels in a warehouse. It is useful to remember that whiskey will not age in a bottle. You can keep a bottle of whiskey for a hundred years unopened and it will taste exactly the way it would have tasted when you bought the bottle. If it is properly stored, it will neither improve nor deteriorate. Whiskey ages in a barrel because the oak wood tends to break down the rougher flavours in the alcohol, leaving it with smoother taste.

The most expensive bottle of whiskey was sold in an auction in Edinburgh last year. The 60-year-old bottle of Macallan Valerio Adami fetched a record price of $1.1 million at a Bonhams’ whiskey sale. The whiskey was distilled in 1926 and bottled in 1986.

About The Author

Bhaichand Patel

Bhaichand Patel is a former director of the United Nations. He retired in 1997