The Business Of Wine Investing

Fine wine can be a good investment, just like stocks, bullion and real estate. Many connoisseurs now purchase cases of rare, critically acclaimed wines in order to sell them when their value increases. David Jackson, CEO of London-based Amphora Portfolio Management — a firm that specialises in wine investments — tells you how the process works.

- Shweta Mehta Sen

How did you get into the business of wine investment?

I was originally a stockbroker, but I live and breathe fine wine. So I looked at the market to see where there might be a chance to add value to the wine market. I noticed that a lot of people were investing in wine, but they were doing so badly. Traditional wine merchants were looking after their wine investment activities in good faith, and thought they were being helpful, when they were actually giving lousy advice. So I said hang on, there’s got to be an opportunity here. Wine has many of the characteristics of other luxury goods — there’s scarcity, desirability, they are generally expensive and are backed up by a good brand. But wine has different characteristics too. You can only use it once. It also takes a long time before it is ready to be used for its main purpose — 10-15 years sometimes. No other luxury good has that kind of incubation period. So if you look at that as a supply chain, someone’s got to look after it — buy it, store it, bankroll it. Wine changes in price and fluctuates over time. That’s where the wine investor comes in. If you love drinking fine wine, you need wine investors to bring it on to the secondary market.

Do you have many investors in India?