Imagine this: you had invested in two cases of top-flight Bordeaux (say Chateau Lafite Rothschild 2000) some years ago at $500 per bottle through a wine advisory. In 2011 you instruct them to sell one case, you realise $1,000 per bottle and take delivery of the other which you drink. For free!
A fascinating scenario which is not entirely improbable, particularly since all resident Indians can now invest up to $200,000 a year overseas "for any permissible current or capital account transaction or a combination of both". Of course, to take delivery of the wine, one would have to travel to either London or wherever the wines have been stored and drink most of the stuff overseas (since one can legally carry only two 1-litre of bottles duty-free back to India).
There has always been a lively trade in fine wines, driven by the fact that (a) supply of the best wines is limited, while demand keeps increasing (b) most fine wines are ready to drink only 10 years after production, and so require funding in the interim and (c) once opened and drunk, supplies of a particular vintage dwindle rapidly, never to be available again (unlike, say, art — which endures almost forever).
While every wine-producing country has its collectors and sellers of the best local wines, the international wine trade is driven almost entirely by the top French wines, of which red Bordeaux comprises over 80 per cent. And what has changed the game in recent years is the increasing demand for top wines by wealthy Chinese consumers. Wine auctioneers like Sotheby's and Christie's have opened offices in Hong Kong (which has no duties on wines since October 2008) — Hong Kong recently overtook New York in terms of value of wine sold.
Another game changer has been the Internet and the transparency this has brought to the business in terms of information. The London International Vintners Exchange tracks hundreds of wines online for its 270 registered merchants from 22 countries and the international trade in fine wines is now worth over £4 billion (Rs 30,000 crore) annually!
So how can you invest in fine wines? You could of course spend time and money getting to know the wines and doing it yourself. This is fun but risky. Or one could still get into knowing about fine wines but outsource the purchase and storage of such wines to a wine advisory, a wine merchant or a company which, like a stock broker, will actually buy wines at your direction (or as advised by their experts), store them and sell them when required. Lastly, if you want to play safe, you could participate in a wine fund which, like a mutual fund, invests in fine wines and provides you with monthly updates on the value of your investment.
There are hundreds of wine advisories and many wine funds — one new company that’s worth looking at is Winetage (www.winetagefund.com) run by Paris-based Meenu Kohli who did a road show recently in India for the fund closing on October 31.
Wines I’ve been drinking: The Bangalore Wine Club hosted “The French Connection” at the Taj West End's Blue Ginger restaurant, bringing together French Vietnamese cuisine with three Bordeaux wines brought down by Winetage’s Kohli — Bad Boy 2007 Saint-Emilion, Moulin d’Angludet 2007 Margaux, and La Reserve de Leoville Barton 2008 Saint-Julien. Serious wines all, with distinctively different aromas and tastes and tannins that puckered the mouth and promised years of aging.
Vive la France!
Alok Chandra is a Bangalore-based wine consultant
