Vin-X examines the importance of provenance when buying Investment-Grade wine
Wine is a great investment, and gives access to a host of unique benefits that other financial products simply cannot match. However, as ever when there is money to be made, there are plenty of unsavoury characters sniffing around the market, and potential investors need to be aware of the facts.
According to a recent article on thedrinksbusiness.com, some estimate that up to 20% of all wine sold globally is fake. Counterfeiters such as Rudy Kurniawan have been reporting to be selling up to US$1 million worth of wine every year, with this particular culprit having been operating from 2002 to 2012. According to Maureen Dowry of Chai Consulting, a specialist wine collection management consultancy, the industry is only ‘scratching the surface’ when it comes to exposing the problem in its entirety. With such frightening figures being batted about, how can investors be sure that what they are buying is genuine?
- Make sure your wine has full provenance. Full provenance is like a full service history when purchasing a car – it gives you a complete picture of where the wine has been and whose hands it has passed through on its way to you. Having such a record which goes all the way back to the Château is a great way to make sure that your wine is genuine, and you should never buy wine for investment without full provenance. All wines purchased and sold by Vin-X have such a record and this should be considered essential when looking to invest.
- Be wary of low prices. It is perfectly possible to find investment-grade wines, usually sold by the bottle, at far lower prices than the market price. However, always ask yourself whythe wine is so cheap – has it been damaged or stored incorrectly? Where is the rest of the case? No one will sell wine for less than it is worth if they can help it, so be very wary of prices which are “too good to be true” – they probably are!
- Buy cases, not bottles. The acronym ‘OWC’ (Original Wooden Casing) is one to look for when looking at cases of wine – individual bottles of wine are much easier to counterfeit, and wine stored in its original casing is a good indicator that the wine has not been tampered with.
- Request Condition Reports.All wines stored at Vin-X’s chosen storage specialist can have a condition report requested, a detailed report on the status of the wine and how it is being stored. Vin-X always procure condition reports before buying or selling wine for our clients, and private investors should always do the same.
- Don’t worry! Although counterfeiting is a serious problem, investors who go through a specialist wine broker should find that the hard work of ensuring provenance has been done for them in advance. Additionally, steps are being taken all the time to address the problem and give investors piece of mind.
By following these steps, investors should be able to avoid any of the nasty surprises that some private collectors and auction buyers have experienced in the last few years.