HomeFinanceInvesting in Super-Tuscan wines can reap returns - of up to 20%

Investing in Super-Tuscan wines can reap returns – of up to 20%

Investors in fine vintage wines can raise a glass to tasty profits: Viva vino! How Super-Tuscan tipples can reap super returns – of up to 20%

Investors in fine vintage wines can raise a glass to tasty returns – with some bottles doubling in value over the past three years. Yet while traditionally investors have focused on fine clarets, from the Bordeaux region of France, many of the best financial returns are now coming from Italian wines. 

The price of the best Italian wines has gone up by 20 per cent over the past 12 months, according to the fine wine trading platform LiveTrade. Bordeaux wines rose in value by 14 per cent on average over the same period. 

Among the biggest winners is the Tuscan wine of Sassicaia. The 2018 vintage has jumped in value by 14 per cent since the start of the year to around £160 a bottle. But a 2015 vintage of Sassicaia, released in 2018, has increased by almost 120 per cent in three years and now changes hands for around £360. 

Premium: Some Italian wines have risen in price by more than French ones

Premium: Some Italian wines have risen in price by more than French ones

Sassicaia is a so-called ‘Super Tuscan’; along with Ornellaia, Solaia and Tignanello (Meghan Markle’s favourite tipple). Another great winery in the region that is highly regarded by wine enthusiasts is Brunello di Montalcino.

Investors are also increasingly turning their attention to the Italian north west region of Piedmont. This includes the areas of Barbaresco and Barolo, where investment wines such as the 2014 Bartolo Mascarello can sell for £180 a bottle. 

Matthew O’Connell, chief executive of LiveTrade, says that although Italian vintages have long been cherished by wine lovers, it has only been in the last decade that they have been taken seriously in the investment market. 

He adds: ‘There were some particularly fine Tuscan wines in the 2015 and 2016 vintages – capturing the attention of not only wine fans, but critics as well. This has helped develop the market from just a niche player.’ 

Rupert Millar, managing editor at the wine tracking service Liv-Ex, points out that former US president Donald Trump may also have inadvertently helped Italian wine investors. He says: ‘Italian wines enjoyed a renaissance when the United States slapped a 25 per cent tax tariff on imports of wines from France a couple of years ago – but not from Italy. 

Although this tariff was lifted earlier this year, when Joe Biden became President, the taste for Italian wine remains. There is also a huge Italian-American population that has kept demand high – and this has impacted favourably on Italian wine investments.’ Millar adds that Italian wines also benefit from being less expensive than French alternatives. He points to examples of relative bargains, such as the Tuscan label Tignanello, for which some vintages can be picked up for just over £80 a bottle. A comparable French top wine, such as Lafite Rothschild or Mouton Rothschild, can cost more than £400 for a similar vintage and the same sized 75-centilitre bottle. 

O’Connell says: ‘Great vintages coming out at the same time as the American tariffs were imposed was a happy coincidence for Italian wine producers. We believe Italian wine investments are in a strong place for an upward surge.’ 

You will not find investment quality Italian wine at the supermarket. Instead, specialist wine merchants can provide investment advice – as well as tips on what you might drink. Among the most well known merchants are Berry Bros & Rudd, Farr Vintners and Justerini & Brooks. 

Reading up on the opinions of wine critics can also be useful, as their views tend to influence values. For example, the judgment of US wine taster Robert Parker holds great sway. He invented a 100-point quality scale used by industry publication The Wine Advocate to rate the investment potential of wine.

Anything rated 96 or above is ‘an extraordinary wine of profound and complex character’ that is the equivalent of gold dust to investors. 

The vintage – the year in which the grape was grown – is a vital consideration as well as the region and vineyard and the variety of grape used. The weather during the year in which it was harvested is a key factor. 

Of course, wine purchased as an investment should not be put at the back of the drinks cabinet, but stored in a special ‘bonded’ warehouse. This is not just to keep the bottles away from temptation, but also because there is no VAT or tax duty to pay on wine resting in a ‘bonded’ controlled environment. 

A warehouse will also be temperature controlled and the wine will be fully insured against loss or damage. For such a service, expect to pay about £20 a year for a case of 12 bottles. Wine is also deemed to be a ‘wasting asset’ by Revenue & Customs so should also escape capital gains tax. 

Traditionally, investors trade in dozens – rather than just a single bottle. They also tend to store wine for at least ten years before trading because it can take several years before supply levels fall enough – as the wine gets drunk – for values to rise significantly. 

When you decide to sell your wine – usually back to the merchant from whom it was purchased – you will be asked to pay a commission equivalent to around ten per cent of its value. 

Never buy investment wine from a cold-calling salesman or on the back of a ‘get-rich-quick’ promotion as there is a strong chance you could be the victim of a scam. Wine investing is an unregulated market and investors are not protected by the Financial Services Compensation Scheme if it all goes wrong. 


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