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CNA
9 hours ago
- Business
- CNA
Fine wine prices have fallen sharply: Here's what collectors are buying now
Merchants of fine wine have had a difficult couple of years. Prices have performed miserably. An index of the 100 most sought after bottles, produced by the exchange Liv-ex, has dropped nearly 21 per cent in sterling terms in the two years to June. To cap it off, a weak 2024 vintage in Bordeaux and Burgundy has dissuaded clients from taking up any new releases of wine from those regions. It's enough to make anyone think about drowning their sorrows. But Miles Davis, a consultant at London-based merchant Vinum Fine Wines, has noted some unusual behaviour recently: His customers are buying again. 'In the first half of June, we were fortunate enough to [have] some chunky orders,' he says. Falling prices have helped shift what kinds of wines buyers are looking for. Traditionally, seasoned collectors would invest in younger bottles and hold on to them for 10 or more years to let the flavour — and hopefully the price tag — improve. With little indication that the market value when they come to sell will justify the holding costs, buyers these days, especially younger ones, are doing things differently. 'The wealthy we see buying fine wines today are buying them to drink [now],' says Nick Pegna, global head of wine & spirits at Sotheby's. 'They are interested in wine and the experience. They are buying mature wines [that are] available now.' So what wines are selling right now? And after some hefty price falls, are there some bargains to be had? NOT SO LONG AGO, THE MARKET LOOKED ROSIER Up until 2020, a series of ever-warmer growing seasons and some improvements in winemaking, including using precision digital tools on viticulture, contributed to a halcyon period for Europe's top winemakers. Then a burst of COVID-era purchases by stuck-at-home wine connoisseurs, who bought up the best of France, Italy and the US through most of 2022, led to a final surge in prices. A hangover from the pandemic period boom then settled in. When the Russian invasion of Ukraine sent commodity prices soaring and central banks raised interest rates sharply, fine wine buying dried up. Bordeaux and Burgundy wines, the most widely traded, have suffered badly. A Liv-ex price index of Bordeaux's 500 best wines has dropped 23 per cent over the two years to June. Its Burgundy 150 benchmark has lost 27 per cent. The depth of this bear market has surprised even long-term veterans of the London fine wine market, such as Stephen Browett, chair of Farr Vintners, who has worked in the business for 45 years. 'This is looking like the weakest wine market we've had in a very long time. In the banking crisis of 2008, the market was very weak but then the duty came off in Hong Kong [causing] the Asian market to boom afterwards. Our business [for French wines] in Hong Kong then just exploded.' 'Buyers are in the driving seat at the moment,' adds Browett. 'But no one needs to buy wine.' Add to this the cost of safely storing these wines, which in the UK can cost from £1 (US$1.35; S$1.72) to £1.50 per bottle annually before any taxes and duties. Those with large collections in storage may have thousands of pounds of added costs annually, painful if some of that collection is falling in price as well. 'What's worrying people about this fine wine market problem is that it's broad,' says Justin Gibbs co-founder at Liv-ex, which is celebrating its 25th anniversary. In past slumps when demand for Bordeaux slowed, buyers opened their wallets to buy wines from Burgundy and Tuscany as well as vintage Champagne. 'But now it's not just Bordeaux [falling in price], it's happening in Italy and California.' Despite the gloom, both Gibbs and his founding partner James Miles see value worth chasing, particularly in Bordeaux. 'Over the next 12 to 18 months this is a great time to be picking up bargains [there],' believes Miles. 'Your downside is limited.' With the wine industry under pressure, adds Miles, the potential for bankruptcies and liquidations will grow. That could mean discounted offers of top bottles from Bordeaux, Burgundy and elsewhere. 'There will be chances across the board to buy wine 30-50 per cent from peak prices of October 2022.' AN EARLY VICTIM OF THE DOWNTURN WAS BORDEAUX There, winemakers have long had a practice of offering their newest vintages for sale well before bottling, known as en primeur. But previous discounts offered by the chateaux to their customers, partly to attract working capital, not only disappeared but turned into a premium to older vintages. That dismayed the market. A reticence to pay a premium for wines, not yet bottled and which might need ageing (and storage) for a decade or more, has put off collectors. 'For sophisticated drinkers who don't need [or want] to deal with ageing their wines, they may prefer to buy drinking wines from much earlier years,' says Chloe Ashton, managing director at 1275 Collections, a fine wine curator. 'There are small parcels of these older, greater wines sitting with chateaux or negociants [wholesalers who buy from the chateaux],' she says. Some of her clients have found supply of rare vintages, such as Mouton Rothschild 1982. Ashton also points to those vintages which received less than stellar reviews at the time, but have since evolved into lovely wines. She suggests looking at the 1983 Bordeaux vintage for clarets or bottles from 1995 and 2001. 'The point is there is not a rule on vintages,' she adds. 'In the last 10-15 years, the baseline [quality] . . . is so much better than it was.' Collectors might rightly ask where the future buyers will come from. US and Asian connoisseurs are less active then they were two decades ago. However some are taking small sips. Where prices have fallen, 'customers are buying better but less,' according to Shaun Bishop at JJ Buckley Fine Wines near San Francisco. 'That has mostly happened for Bordeaux, Burgundy less so.' His clients were less bothered by the swelling cost of the chateaux releases during en primeur. Bishop says that what customers do not like is the uncertainty about the final delivery price of foreign wines, due to President Donald Trump's vacillating policies on tariff s. Instead, they prefer to buy what Bishop already has in stock, which is dwindling. 'The consumer right now wants something that is in a bottle and ready to go.' Hong Kong was once the epicentre of the Asian buying boom in the mid-noughties. Paulo Pong at Altaya Wines thinks that while his customers still love Bordeaux, there's plenty of stock available that is ready to drink. So for them 'there's no point in buying young Bordeaux and ageing'. Altaya has had more interest in Burgundy after prices have fallen. Given the small acreage and low volumes produced — in bottles not cases — a little selling can quickly move prices of the most expensive wines. 'Increasingly, there's a trend [in Hong Kong] of people drinking more white wine,' he says. 'With Burgundy this is a challenge for us, as we can't get enough of some top whites. And [our clients] are drinking these much younger, focusing on Premier Crus and Grand Crus from communes such as Puligny-Montrachet and Chassagne-Montrachet.' Top producers include Coche-Dury and Colin-Morey. By Alan Livsey © 2025 The Financial Times.
Bloomberg
23-06-2025
- Business
- Bloomberg
How to Invest in Fine Wines: A Step-by-Step Beginner's Guide
Strategies to build a wine portfolio that could make you money and give you something delicious to drink. By Illustrations by Rose Wong In 2012, Domaine Armand Rousseau Chambertin Grand Cru Burgundy, vintage 2010, was released at £5,000 ($6,638) a case. Ten years later it was selling for more than £60,000. Would-be wine investors get stirred up by numbers like these—a 1,100% increase. After all, the number of bottles of a top wine is finite. As people drink them up, ever-increasing scarcity drives their value higher. You just have to have good taste and be patient, right? Like a great cabernet, the reality is more complex. Passionate collectors buy wines they love and plan to drink, yes, but to invest you have to select the right ones at the right price at the right time—if you have access to buy in the first place—and have them maintain their value. To decide when to sell, you need data and a good grasp of the current wine market. Higher interest rates, inflation, consumer confidence and geopolitical events all affect it. Right now, the threat of tariffs has caused US buyers to take a sharp pause. Still, cases of wine are tangible and won't disappear in a market crash—unless you need to drink them to take the edge off. A 2024 study of 50 US wealth managers by UK-based WineCap Ltd., which designs customized portfolios, found that 1 in 3 high-net-worth investors look to fine wine for stability in the face of stock market volatility. The advent of commercial wine auctions in the US in the mid-1990s gave wine lovers a way to buy and sell rare bottles. But it wasn't until 2000 and the introduction of Liv-ex, a sort of global fine wine stock exchange, that investors had a transparent way to track the value of individual brands and vintages. Technology has further transformed the wine investment space, with trends including blockchain tracking for authenticity, fractional investing schemes and digital sales platforms. Liv-ex may be only for merchants, but LiveTrade from London-based Bordeaux Index Fine Wine & Spirits, for example, is open to collectors as long as you store your assets in a UK or European Union in-bond warehouse. Sotheby's auction house even offers an 'instant' 90-bottle investment cellar for $25,000. It's a good time to get in. 'Wine prices go in cycles of rising, falling, going flat, then rising again,' says Justin Gibbs, Liv-ex co-founder and deputy chairman. 'We've been in a down period, and we're closer to the bottom than two years ago.' Tom Gearing, co-founder and chief executive officer of UK-based investment company Cult Wines Inc., says, 'Fine wine prices are approaching a five-year low. Château Haut-Brion 2021 is available at $315 a bottle.' That's about half its release price in 2022. But because the 2024 harvest in France was the smallest in modern times, future supply will be squeezed, pushing prices back up. So what are some industry leaders buying? Matthew O'Connell, CEO of LiveTrade and head of investment at Bordeaux Index, sees the price dip in Burgundies and grower Champagne as a big opportunity. Some almost impossible to obtain grands crus can now be had, many at prices lower than they were two years ago. Rising trading has Anthony Zhang, CEO of Vinovest Inc., 'poised for cautious optimism' in 2025. A reckoning is coming for Bordeaux futures, which used to be a big part of wine investment fund portfolios, Gibbs says. 'Release prices have been so high that if you bought a case of each of the top 50 Bordeaux châteaux when they were released as futures for recent vintages, you would have lost money.' Investment Grade 101 Only a fraction of wines qualify as truly worth investing in. To be in that tier, a wine should … ① Be consistently made to age for 15 to 20 years or more. ② Have a long-established reputation for quality. ③ Be distributed globally. ④ Have a track record of appreciation. ⑤ Earn high critic scores. ⑥ Come in a case lot of 12 bottles, each (usually) costing $100 or more. 'The concept of what's collectible and investment grade is changing,' says Cult Wines' Gearing. 'The problem with up-and-coming producers and regions is they don't have the same liquidity as most blue chips.' Ample supply and demand makes blue chips easily tradable. Those include Bordeaux, especially first-growth Lafite Rothschild, Mouton Rothschild, Latour, Haut-Brion and Margaux; Burgundy grands crus; prestige Champagnes; the Rhône's great Château Rayas; Italian Super Tuscans and Barolo and Barbaresco reds; and California cabernets. Top names from Spain and Portugal have begun to gain traction, especially among younger collectors in search of value and quality. According to Liv-ex, Vinovest and Gearing, Spain's Vega Sicilia Unico was one of the successes of 2024. 'There's a lot of opportunity in other major regions,' Westgarth says, 'like Trimbach's Clos Ste. Hune riesling, from Alsace.' The Loire and Germany are also in the mix. Benchmark Wine Group founder Dave Parker calls Oregon 'the new Burgundy' and has seen price growth for Washington state's Quilceda Creek, which has received 34 100-point scores from seven different respected critics. As with stocks and bonds, spread your risk by investing in several regions and countries. And seek out older vintages from classic labels in classic fine wine regions. Four Steps to Start ① Check your expectations Ask yourself: Do you want to drink part of your collection, or are you in it just for the profits? Are you conservative, in search of blue chips with higher liquidity, or adventurous, looking for riskier up-and-comers? Remember: Investing in wine is a long game. Even though sometimes rare, exclusive brands can be flipped quickly for profit—from January to September 2022, for example, a case of 2012 Salon Le Mesnil Champagne soared 232%, from $4,670 to $15,485—for the best gains, you really have to wait. Hold for at least 3 years, preferably 5 to 15, when enough bottles have been drunk to lower the supply, thus increasing prices. ② Research the fundamentals Browse Bordeaux Index, Cult Wines, CultX, Vinovest and WineCap for general info, and Wine Market Journal for auction prices. Liv-ex's many indexes, from the Fine Wine 100 to Bordeaux Legends 40, track the most traded wines. Both Cult Wines and Liv-ex regularly issue reports on the investment potential of different regions. A newish Substack, In the Mood for Wine, features a very basic series on investing with detailed spreadsheets to get you started. Although this shouldn't have to be said: Attend tastings and drink wine—and plenty of it! ③ Find a trusted adviser Most top platforms, like Vinovest, offer a variety of ways to invest, from self-directed to managed portfolios. Some, such as CultX, LiveTrade and Vint, include trading marketplaces, and many, like Cult Wines, offer a one-stop-shop approach: strategy and selection; sourcing (provenance is huge); storage, insurance, market analytics and valuations; and experts to authenticate bottles. Your budget helps determine which to choose. Portfolio plans at Vinovest start at $1,000, but LiveTrade's O'Connell says $10,000 is more realistic, because a single case of top Bordeaux or Burgundy could easily surpass $3,000. Alexander Westgarth, founder and CEO of WineCap, suggests $10,000 to $50,000. Remember to factor in fees, such as insurance and storage. ④ Store it Keeping wine at the correct 55F temperature in a cool, dark place is essential. Experts agree that the value of wine kept in a well-known third-party bonded warehouse such as Octavian Wine Services Ltd. is higher than for bottles stored in your own cellar, and the best advisers offer it as part of their service. The annual cost to store a case of wine in the UK is about £15 to £20, Westgarth says. Find out if an expert checks a bottle's provenance. The Big Five Regions for a Balanced Portfolio ① Bordeaux Bordeaux's long-held crown is slipping, says Liv‑ex's Gibbs. 'In 2010 its crus classés accounted for more than 70% of Liv-ex trades. But that's dropped to the 35% to 45% range.' Despite the current downturn, says Vinovest's Zhang, some vintages of certain brands are good bets, such as 2005 Château Margaux, which has appreciated 12% annually. A solid buy now might be 2021 Château Lafite Rothschild. The UK merchant's 2022 release price was £5,800 a case, and in late May it was selling for about £3,900. ② Burgundy Prices for red wines from this renowned region started soaring in the mid-2000s, with a peak in October 2022. 'Whites are now taking the top growth spots, suggesting a shift in collector preference,' Gearing says. Domaine Leflaive Chevalier-Montrachet, for example, bucked 2024's overall downward price trend, rising 8.1%; Vincent Dancer Bourgogne Blanc led with a 26.7% increase. Consider regional or village bottlings like Chambolle-Musigny, O'Connell says, as well as hot micro-producers such as Kei Shiogai, whose wines can cost $1,000 a bottle. As for grands crus such as Romanée-Conti's La Tâche and other blue-chip grands crus? 'Prices will go up again, and perhaps before too long,' he says. ③ Champagne Broad interest in Champagne started a decade ago, when investors realized great examples such as Cristal were undervalued. Despite 2024 declines of 11.2% on average, even for top-tier brands, high-end vintage and smaller-production prestige cuvées are still bubbling. One standout: Bollinger PN VZ16, up 10.7%. ④ Italy 'Italy is the strongest investment category right now,' says Benchmark's Parker. The number of Italian brands in the Liv-ex Power 100 more than doubled from 2018 to 2024. Gearing reports: 'Barolo and Barbaresco are outperforming many Bordeaux and Burgundy reds.' (Bruno Giacosa Barbaresco was up 7.5% from Jan. 1 to Dec. 31, 2024.) Elsewhere, Biondi‑Santi Brunello di Montalcino 2010 continues to hold its value. ⑤ California In 2020, 200 different California wines traded on Liv-ex, an 809% jump from five years before. Napa Valley cabernet—Harlan Estate, Screaming Eagle, Dominus and Opus One—and Ridge Vineyards Monte Bello from the Santa Cruz Mountains are the main game. Also gaining traction: Sine Qua Non, MacDonald, Hundred Acre and Futo Estate.
South China Morning Post
23-05-2025
- Business
- South China Morning Post
Singapore jails mastermind behind US$10.9 million fake wine investment scheme
A man behind a multimillion-dollar wine investment scheme in Singapore that caused investors to lose more than S$14 million (about US$10.9 million currently) was jailed for seven years and two months on Thursday after being on the run for 13 years. Advertisement Eldric Ko, 51, was the CEO of Premium Liquid Assets (PLA), which he incorporated in October 2005 to distribute, sell and broker sales of fine wines. However, when it became clear that the business was not sustainable, Ko, a Singaporean, decided to cheat investors out of their money and postpone PLA's liabilities. From 2008 to 2011, the accused and a co-conspirator, Koo Han Jet, devised and carried out the scheme, which involved the use of what the prosecution called a 'carefully constructed network of shell entities and overseas accounts' and legal documentation to 'create a veneer of legitimacy to the company's operations'. Ko misappropriated S$12.67 million of investors' funds, and squirrelled away S$8 million for his and Koo's personal benefit, Deputy Public Prosecutor Michelle Tay said. Advertisement 'No restitution was made, and the hundreds of investors remain saddled with their losses to date,' she told the court. Based on investigations, more than S$14 million was paid by victims of PLA's scheme, with more than 200 people affected.
CNA
22-05-2025
- Business
- CNA
Jail for man who siphoned more than S$12.5 million of investor funds through fake wine investment scheme
SINGAPORE: A man behind a multimillion-dollar wine investment scheme that caused investors to lose more than S$14 million (about US$10.9 million currently) was jailed for seven years and two months on Thursday (May 22) after being on the run for 13 years. Eldric Ko, 51, was the CEO of Premium Liquid Assets (PLA), which he incorporated in October 2005 to distribute, sell and broker sales of fine wines. However, when it became clear that the business was not sustainable, Ko, a Singaporean, decided to cheat investors out of their money and postpone PLA's liabilities. From 2008 to 2011, the accused and a co-conspirator, Koo Han Jet, devised and carried out the scheme, which involved the use of what the prosecution called a "carefully constructed network of shell entities and overseas accounts" and legal documentation to "create a veneer of legitimacy to the company's operations". Ko misappropriated S$12.67 million of investors' funds, and squirrelled away S$8 million for his and Koo's personal benefit, Deputy Public Prosecutor Michelle Tay said. "No restitution was made, and the hundreds of investors remain saddled with their losses to date," she told the court. Based on investigations, more than S$14 million was paid by victims of PLA's scheme, with more than 200 people affected. Ko pleaded guilty to one count of criminal breach of trust and two counts of acquiring property representing benefits from his criminal conduct. Another 12 charges of a similar nature, including cheating, were taken into consideration for his sentencing. THE SCHEME PLA offered a wine investment scheme which purported to source wine from suppliers in France and sell the wine to investors. The company hired sales agents to solicit investors to purchase wine from PLA in exchange for commissions. The company also gave investors access to view their portfolio of wines online and offered them the service of storing wines at a warehouse. It also offered to help them sell wines in exchange for a 5 per cent brokerage fee. After operating the business for a few years, Ko realised that the company was selling more than what it could purchase, in part because it was not making enough profits to cover its costs. "The accused knew that with the way that he and Koo were running (PLA's) business, (PLA) had growing liabilities to its investors, which were more than (its) assets, and which (PLA) could not fulfil. In the accused's words, there was a 'hole' that kept getting bigger," said Ms Tay. As a response to this, Ko and Koo decided to cheat investors under a specific scheme known as "en primeur", which involves buying wine futures. Investors were told they could buy wines which would only be bottled in around two years' time. After the wines were bottled, investors could receive three years of free storage in a warehouse in France, and the wines would be fully insured. Investors could only sell their wines after they were bottled. These investors were given an invoice stating their ownership, with an expected delivery date for their wines. Instead of being a genuine investment scheme, the pair only meant to buy time to put off PLA's liabilities to investors. In fact, they never even sourced the purported wines. The duo agreed to split the proceeds equally. SHELL ENTITIES CREATED On Aug 7, 2008, Ko incorporated a shell entity, Grand Millesimes Limited, in the British Virgin Islands to act as a fictitious supplier of wines. Koo then forged invoices from the company to PLA, purportedly for the sales of wines. In turn, Ko used these forged invoices to justify his transfers of investors' money from PLA's bank account to Grand Millesimes Limited's bank account in Switzerland. From there, Ko would disperse the money to different accounts he had access to, deliberately choosing accounts that he thought the Singapore police would not be able to obtain information about. He shared Koo's portion of the fraudulent gains through illegal remittance businesses and in cash. Ko later acquired his own illegal proceeds through fund transfers into the account of another shell company he created in July 2008. This company was called Premium Assets Management. It was meant to be a holding company and investment manager of a wine fund, but the fund never materialised. The company was also not licensed by the Monetary Authority of Singapore to carry out business in fund management. More than 240 police reports have been lodged against PLA in relation to the fraud since May 2011. CAUSED "SEVERE HARM" Ko left Singapore on May 28, 2011, before police investigations commenced to avoid being caught. He was contacted by police via email requesting his return, but he did not respond to them. Ko only returned to Singapore on May 25, 2024, and was arrested. He has been in remand since and was produced in court via video link. Court documents did not specify the reason for his return. Meanwhile, Koo left Singapore on May 3, 2011 and has not returned. Seeking between seven years and seven years and seven months' jail for Ko, Ms Tay listed multiple aggravating factors, which she said far outweighed mitigating factors. She said Ko was dishonest from the outset and made sophisticated use of legal documentation to perpetrate the fraud. As the mastermind, Ko has the highest culpability, and he caused "severe harm" to hundreds of victims, said Ms Tan. Ko also remained at large for 13 years, she said.
