Investing in wine: small appellations are more profitable in the short term

Wine investments return 4% per annum over the long term (with peaks of 12% in good years), which is more than adequate given the current economic climate. To take advantage of this, you still need to know the market well and make the right choice, which may not be available to you. Therefore, it is often better to enlist the support of a professional in the industry or, even more practically, to turn to a specialized investment fund.

Types of wine

Don’t focus on the big châteaux of Bordeaux, which are already well-regarded. Unlike a simple consumer, the investor’s goal is not to taste the nectar, but to multiply his investments. Its priority is the market, which varies by appellation and vintage. The first reflex is to invest in the great castles of Bordeaux (Latour, Margaux…) or the “iconic” estates of Burgundy (Romanet-Conti, Armand Rousseau…).

These are solid values ​​that have shown good results in recent years, but their price is such (sometimes more than 500 euros per bottle) that we should not expect another explosion in their ranking before ten years from now. Bet on less prestigious wines, but with more potential in the short term (5 years), such as Châteaux Beychevelle, Duhart-Milon, Berliquet or d’Issan, displayed between 50 and 90 euros per bottle.

Annual dynamics of wine prices, calculated over the last 5 years (1)

Capital

(1) Average value established in 2022 for the last 14 vintages of each wine category. (2) 165 selected wines. (3) 178 selected wines. (4) 33 excellent wines selected. (5) 21 excellent wines selected. (6) The 10 first classified or assimilated accretions (Angelus, Ozone, Cheval Blanc, Upper Brion, Lafite Rothschild, Latour, Margot, Mouton Rothschild, Pavy and Petrus). (7) 90 best wines, excluding premier crus. (8) 13 excellent wines have been selected. Source: Wine Decider.

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Purchase

Specialized companies can create a cellar for you and engage in resale of wines. Wine can easily be purchased, including “en primeur” (before bottling, therefore at a lower price), through specialist online wine sellers such as Lavinia or Millesima, and then resold through auction sites such as iDealwine or Cavacave. But the most convenient way, if you want to make a big bet, is to rely on an organization that will take care of everything from purchase to resale. There are two types. First of all, those like Cavissima, U’Wine or Patriwine, who create an individual cellar on behalf of their client, which they keep and resell. Expect an entrance ticket of between 10,000 and 30,000 euros.

Another category: wine land groups (GFVs), available through an asset manager (see page 18), where investors own not bottles but the securities of a fund that buys plots of vineyards. An attractive choice when you are subject to IFI, but it also requires a high stake: between €15,000 and €20,000.

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Conservation

Make sure that the labels on the bottles remain in their original condition. Nothing prevents you from storing bottles in the cellar if it meets the requirements of temperature (from 12 to 14 degrees), humidity (about 70%) and darkness. But then check their state of preservation: the wine level should remain high, which indicates that there is no evaporation (a risk occurs if the cork dries out). The label must also be intact.

However, moisture can spoil the paper. Solution: Wrap the bottles in plastic wrap. By storing great vintage items in beautiful wooden boxes, you can also increase your value by 5-10% over their cost.

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Taxation

You get a capital gains allowance of 5% per year. Wine has a special tax treatment: nothing to pay for the transfer of less than €5,000 and above, your choice of a flat rate of 6.5% of the sales price or capital gains tax at a rate of 36.2%. , with full release after 22 years (5% decline per year after 3 years of ownership). An advantage which, however, will only benefit wines capable of reaching this age without denaturation.