Hong Kong - Wine experts may disagree on most things, but
one thing they all appear to agree on is that Bordeaux remains the
best option when looking for a fine wine investment.
Anthony Hanson, senior consultant with Christie's Wine Department,
says Bordeaux over the years has proved to fairly safe and dependable
for anyone looking for an alternative place to put their money during
the current economic times.
'However, I would put in a word for Burgundy because they have dry
whites as well as wonderful reds,' he said.
Buying at auction or from a reputable merchant is just one way of
starting your wine collection.
It is also advisable to go for wines rated by top critics and to
ensure they are insured at replacement value and have been are stored
in the best possible conditions. A bonded-warehouse in or close to
the country of origin will give secure storage tax-free.
Greg De'eb, general manager of Crown Wine Cellars in Hong Kong,
says he has seen a huge increase in collectors shipping back to Hong
Kong since the former British colony abolished wine tax in the last
budget in February.
'Hong Kong is the best world wine paradise at the moment. It is
the only developed economy in the world with no tax and no VAT,' he
said.
'Worldwide collectors have now accepted that wines can travel
around the world in refrigerated containers and it doesn't affect
their value.
'What determines a lower or higher price is the condition of the
bottle, has the label been scratched, is it in its original case and
where it has been stored?' he said.
But there are other options, for those who do not have the
knowledge or confidence to make the purchases themselves such as wine
investment funds and brokers.
Andrew della Cassa is director The Wine Investment Fund, which for
Hong Kong investors operates like an mutual fund based in Bermuda
with a portfolio of Bordeaux wines.
The minimum investment over a five-year term is 10,000 pounds
sterling (14,500 dollars) with a management fee for private investors
of 1.5 per cent annum and a performance fee of 20 per cent.
'Our first tranche was issued in 2003 and for every 100 pounds
(145 dollars) the investors gave us, they got back 208.61. They're
very happy and we are very happy,' said della Cassa.
'Most private clients invest every year. They put in 100,000
pounds a year and at the end of five years take out 100,000 from the
first year and reinvest what they have made and so create a nice
little investment annuity.'
As a brokerage Premium Liquid Assets Ltd buys the wines for
investors, stores and insures them for three years and then sells
them.
The investment limit is one case - 12 bottles - of wine, which at
current values starts around 60,000 Hong Kong dollars (7,700 US
dollars) and their fee of 12 per cent is paid on sale says the
company's senior portfolio manager Angelina Teh-Leong.
'It's very simple,' she said. 'We send the client a quarterly
valuation. If they are comfortable with the appreciation, they can
liquidate before the end of the three years but we do not refund you
any proportion of the storage or insurance.'
At the end of the day, there is always a risk involved. Jim Budd
keeps a log on his website (www.investdrinks.org) of wine investment
disasters and companies involved in investigations. He also offers
some sobering advice in the current climate.
'If you do want to invest in wine, wait until you judge that the
market has bottomed out then buy,' he advises.
The old adage still applies: buy at right time, at the right price
with right provenance and from a reputable company and store the wine
in your own name.'
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