Fine Wine Investment

By June Ramli

Investing isn’t limited to property or stocks—there are more budget-friendly options, such as fine wine. While real estate and shares require substantial capital, fine wine offers an alternative way to grow wealth with a lower entry point.
Beyond financial returns, wine investment comes with the added benefit of enjoyment—savvy investors can sip on their portfolio while watching its value rise.
To shed light on this unique investment opportunity, we spoke with Michael Anderson, Head of Auctions and Secondary Market at LANGTONS.
With over 15 years of experience in the Australian wine trade, Michael shares his insights on what defines fine wine, how to start investing, and the advantages and challenges of this growing market.

What defines a “fine wine”?

A fine wine is the epitome of its category and surpasses any other wine in the space through its rarity, history, expert technique, and level of quality. Fine wines can be young or old and demand prices around the world that are beyond the average. It’s important to note a winery that is known for producing fine wines does not necessarily have reservations on continuity in the space. Things can, and often do, change.

What is fine wine investment?

It’s important to note the main consideration with fine wine investment is that it shouldn’t be treated like crypto or stocks as it’s a physical and perishable product. This means setting up a cellaring space is key, and purchasing from a reputable auction house is vital to ensure your wine has been stored correctly and hasn’t been spoiled.
Fine wine investment can be carried out in two main approaches. Firstly, investors can be speculative in their purchases predicting a wine or winery to increase in value and invest early. Or secondly, they can work with reputable producers—think the likes of Rockford or Wendouree here in Australia—to purchase new-release wines at humble release price tags to keep and sell later for a higher value.

The advantages and disadvantages of fine wine as an investment

Disadvantages:

Wine is a perishable product which comes with risk of spoiling if not cared for. This means buying from a reputable auction house is very important to ensure the wine has been stored correctly in its life so far but also so you also have access to services such as recording. It also means you need to be set up to store the wine with an appropriate cellar space to make sure your investments don’t spoil and become worthless. Also being a physical product, wine takes up space so you need to ensure you have enough room to store it. Wine fraud is a thing, so again it’s important to buy from reputable auction houses and stores to ensure its provenance.

Advantages:

The fine wine market has seen steady growth over a number of years and doesn’t see the fluctuation other markets experience. It’s a safer play as long as you have the correct preparation in terms of research and cellar set-up. Wine is an investment that can be enjoyed! Savvy investors often can enjoy drinking their wines as much as they do the profits raised from them by buying and selling well to keep some stock and still profit. Fine wine is a fun investment topic and is way more interesting than stocks and bonds which makes for a great topic at the dinner table without boring guests.

How to get involved in the fine wine investment space?

Before you even think about placing a bid, researching the fine wine market, the key wines and producers at play plus milestone vintages is a vital step. This can be done using tools such as the LANGTONS Classification of Australian Wine which outlines the benchmark for fine wine in Australia. Another step of preparation is to ensure you have the correct cellaring space set up for your purchases, or look at storage facilities to keep them in and also make sure you add this cost into your budget.
Setting goals for your investment journey is also key to ensure you don’t overspend, and have clear ideas for the end result of your wines whether it be to enjoy or sell.
Once you’re ready, the easiest way to get involved in fine wine investment is through auctions like we hold here at LANGTONS. You will be able to find a great range of wines in one space with plenty of support if you need guidance in your investments. Here at LANGTONS, we have a private shopping service, where a dedicated team of Private Client Managers can guide you on the best decisions for your goals and desired portfolio.

Any on-trend regions, varieties, and producers to keep an eye out for?

Closer to home here in Australia, producers featured in the LANGTONS Classification of Australian Wine increase in value and are great for investing. Think producers such as Wendouree, Rockford, Bindi, Giaconda, Penfolds, and Henschke.
Further afield, Burgundy is a hot topic in the investing space. The prices on the top wines have gone beyond the reach of 99.9 per cent of buyers, and even the entry-point wines have risen sharply. There is still some value to be found, but the producer should be the first thing you look at when choosing where to buy.

General advice and tips from an expert

• When starting out in fine wine investment, go for small and reputable producers so you know their status in the market.
• Keep an eye out for birth year wines and plan ahead with them—we just saw big premiums paid on the 1974 Penfolds Grange last year as an example.
• When you can, buy three or six bottles of everything so you can potentially sell some stock and enjoy some for yourself.
• Research, research, research! There are plenty of wines out there that may look like a fine wine but definitely aren’t, so don’t get caught out.