SPOTLIGHTSPOTLIGHT
LIQUID ASSETS
Fine wines aren’t just for drinking - the right tipple can actually prove a worthwhile investment - and a tax-free one to boot
Wine investment may not seem like the most exciting place to put your money but it can be a lucrative place to put your assets. Indeed, on average, wines increase around 11% per annum.
As a case study - if you’d been in the right place at the right time and bought a Chateau Rayas 1990 in ‘94 for £380 ($580) you would have made a staggering 1118% return on your investment with a sale price in 2003 of £4250 ($6475).
Demand for fine wines is increasing. Prices are being driven ever-upward by new markets such as the Far East and Russia and the fact that, as time goes on, more bottles are consumed and thus the remainder become more scarce. Interestingly, the most expensive wine ever sold was utterly undrinkable. A bottle of Bourdeaux belonging to Thomas Jefferson sold for £105,000 ($159,980). It was a 1787 Chateau Lafite and still, 18 years after its 1985 record sale date, is the most expensive wine ever sold. There are key factors to consider when thinking about plunging into the world of wine. Pick wines from a region like Bordeaux from good vintages - these are frequently traded in a strong secondary market. Take into account the high costs of storage and insurance - which has a much lower impact the higher the value per bottle of your wine. Making a healthy return is essential - selling must be done as close to the final customer as possible - intermediaries will take a hefty commission. Buying ‘under bond’ will reassure that your wine has been properly stored befoe you buy it. Lastly, keep the bottles stored far away from any tempted teenagers.
If you like the idea of investing in wine but want something on a slightly grander scale - and the opportunity to take frequent trips to France - a vineyard may be the answer. A successful crop can yield high return on investment - as much as 20% per annum.
TRUFFLE SHUFFLE
Kobe beef is reputedly the finest in the world with its rich marbling of fat. The market for this luxury commodity is constantly increasing as our tastes become more refined. In recent years the US has seen an increase in its native Kobe beef farms - and investment in these has been heavy. The final product can sell anywhere from $100 - $300 per pound.
TEA TIME BOOZE CONTROL
CASH COW
EDITORÕ S CHOICE
The truffle has long sat atop every worldÕ s most expensive food list and rightly so; it is highly prized by chefs and sells for up to £5500 ($8380) per kg. Purchasing saplings infected with Perigord truffle spores is cheap at £10 ($15) a pop - the cost is in the ten year wait while the trees grow before one can begin to harvest the fungus.
Tea is experiencing an exciting rebirth in luxury brands. Investors are looking at Ethiopia as a new source - it has large tracts of land perfectly suited to growing this desirable crop. On the retail side there is a burgeoning high end market with brands such as The Rare Tea Company (rareteacompany.co.uk) creating a storm in a teacup.
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