Once upon a time, I had grand visions of having a portfolio of expensive wines tucked away in some dark, temperature and humidity-controlled cellar, quietly building up dust and dollars.
But as the years passed, the urge waned to collect wine for purely financial gain. That’s not to say that I no longer invest in wine; it’s just that I now buy wine that builds with the prospect of a better drop and greater enjoyment down the line.
There are those that do invest in wine for financial reasons, though. Here is some food for thought.
An excellent guide to which Aussie wines will work well as an investment is Langton’s “Classification of Australian Wines”.
In this classification, Langton’s provides their diagnosis of which wines will afford the collector with a positive gain through the analysis of supply, demand, and sale prices at wine auctions – which by the way, they also conduct. Langton’s defines three wine classifications – Excellent, Outstanding and Exceptional.
Luminary legends such as Penfolds Grange and Henschke Hill of Grace appear on the Exceptional list, as does one of our very own Yass Valley legends, the Clonakilla Shiraz Viognier. That’s a fantastic effort for Clonakilla.
Of the thousands of wines in the market today, there are only 22 labels that appear in this Langton’s category. There are also 46 and 68 wines in the Outstanding and Excellent categories, respectively. If you are looking for a wine to provide you with financial reward down the track, this guide is an excellent starting position for you.
And what do the financial rewards look like anyway?
As an example, we bought each of our kids a bottle of Penfolds Grange for their birth years. I bought the first one – the 1999 release – in 2004 for $100.
As the bottle has been kept in cellar conditions, it is now worth around $800 if my son chooses to sell it. If I had invested that $100 in 2004 at an annual compound rate of around 8%, I would have about $400. In this example, there seems to be a greater financial reward with the investment in that specific bottle. This is not going to be the case for all wines of course. It won’t be as much for many bottles, and for some very special bottles from exceptional vintages, the gains may be much higher. But it’s all a bit of a punt – like all forms of investment, do your research thoroughly first.
If a wine improves in value over the years, then it’s a better than odds-on bet that it’s improving in quality as well.
Whether to sell or enjoy is a great choice to have.
Cheers!
Brent Lello
