Wine is not just something to dine with; it can also generate 10-15 per cent annual returns for those who care to invest in vintage spirits which are witnessing a surge in demand from global collectors.

“Fine wine investment is an alternative commodity investment and since we have opened a branch office in Mumbai last year, we have secured almost €3 million (about Rs 25 crore) of investment,” Robin Khanna, CEO of Bordeaux Traders, a fine wine investment brokerage, told PTI.

Bordeaux Traders based in Vienna, Austria, deals primarily with fine wine investments. “Currently, we manage portfolios for just approximately 50-60 investors, but as mentioned, this is only the very beginning. The potential market size is enormous as this new investment type is currently creating waves,” he said.

Bordeaux Traders specialises in the most expensive and prestigious luxury wines, he said, adding a minimum of Rs 10-15 lakh is needed for investment.

The investment is generally made in euros and returns generated have tax implication as per Indian law, he added.

Fine wine investments are not regulated by any authority. It is a tangible asset and as such investors have the freedom to profit from investment without any sort of authorisation, he said.

For conservative investors it has been able to generate return of 10-15 per cent, while for speculative investors, returns sometimes ranged from 100 to 200 per cent.

Explaining the rationale for capital appreciation, Khanna said the reason for staggering price increases in fine wine investments is limited supply and increasing global demand.

Luxury wines have become status symbols for the rich, he said, adding, not everyone can get their hands on these fine wines, because of their cost and limited availability. This is especially true of good vintages.

These wines have outperformed global stock market indices, he said, adding, certain stocks have even outperformed gold.

But not every expensive fine wine will necessarily increase in value and investors need advice from expert wine brokers, he added.

“Recent experience also shows that fine wines are a recession-proof investment. Indian investors have already begun taking advantage of this opportunity,” Khanna said.

Heady returns from wine are attracting worldwide attention and Bloomberg now lists the Liv-Ex 100 Index, a blue-chip index for fine wines.

For secure storage of fine wines, the brokerage firm has warehouses in London, Austria and Bordeaux in France.

Investors receive their certificates of ownership, just like with any other investment, and then hold on to achieve returns, he said.

Related Topics