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Wine is not for investing, says Parker
Spending a lot for a top quality wine is fine if you plan to drink it, but not as a form of investment, says the world’s leading wine critic Robert Parker.
Robert Parker at a Wine Advocate press conference in London in January (Photo: DB)
Accounting for professional storage costs, slow appreciation and insurance makes investment in wine a tough and often fruitless endeavour, according to Parker.
Speaking to news agency Reuters, he said “It has to be stored properly. It has to be insured. That’s a significant tie-up of assets.
“For 37 years, I’ve thought wine was a terrible investment.”
Parker, who has had an unprecedented impact on the world of wine through his 100-point scoring system that can make or break wineries, is this year stepping down from tasting Bordeaux en primeurs and handing the reigns to fellow Wine Advocate colleague Neal Martin.
He will, however, still be tasting back-vintages of Bordeaux, and will soon be re-scoring the Bordeaux 2005 bottlings that he famously admits scoring too low first time around.
Ahead of the 2014 release later this year, Parker has been critical of Bordeaux overpricing its last three vintages, losing the confidence of merchants and wine buyers across the world.
Speaking to the drinks business last month, he said that Bordeaux has “lost a big share of the American market, the wines are disappearing from restaurants, and a lot of that is their [the Bordelais’] fault – they have not been realistic with prices on 2011s, ’12s or the ’13s.”
Parker predicts that the Bordelais will have to drop their prices by 30% in order to win back confidence in the region’s wines and compete with the growing influence of New World offerings.
“The Bordelais have been slow to realize it’s a global marketplace now”, he told Reuters.
Rather an odd comment on ‘investing’ from Mr Parker given his influence on wine price change over time.
I am sure that Mr W Buffett would not be shy proclaiming how his investments have worked but the common factor with Mr P & Mr B, is that prices changed over time many moons before their comments were made public.
Peter Lunzer, Lunzer Wine Investments Limited
Dear Ladies and Gentlemen,
we are investigating all wine auctions worldwide since 1996.
Since then, we calculate wine indices for the major wine regions of the world.
We have over 30 mio wine prices of over 11,000 wineries worldwide in stock.
Of course, there are price fluctuations as in any investment, but over 18 years we achieve a performance of 10% – 16% depending on the region, wineries and vintages.
Even Bordeaux, which is located in the very high priced segment, still generates 12% a year.
Investing in wine is – if you are interested and informed – a very safe and lucrative investment.
After several years of analysis and tests Wine Stocks is the only database in the world, approved by the CSSF Luxembourg, PWC and the Bank Rothschild to evaluate wine funds worldwide.
That makes ensure that our credibility should be out of the question. Wine-Stocks do not trade with wine and is fully independent of each market.
May be Mr Parker is not up to date.
Kindly regards
Ron Freund
Dipl. Sommelier
C.O Master Sommeliers
CEO Wine-Stocks AG, Zürich, Switzerland
Well taking into consideration <<>> of these costs it is often the case that over head will cost more than the appreciation of wine over the years.
However, to get a current valuation I have found that http://wine-buyers.com has given me fair current value on my wines and of course I don’t take the same considerations into cost analysis as Robert Parker has. If you do this calculation for one bottle of course it would not pan out. But if you have several 100 or thousand bottles then the cost to valuation changes dramatically. In both cases Robert Parker and Ron Freund have a valid case for investing in wines or not.
Jean-Pierre a private wine collector
http://wine-buyers.com
If people choose to spend their money on wine in the hope that it will appreciate in value then that is, of course, their prerogative. The fact remains that the very best wines in the world are limited in supply and the demand for them to a great extent has been influenced by Mr Parker and his fellow critics so it is slightly disingenuous for him to criticise the concept of investing in wine, particularly when he himself has encouraged his readers to buy a particular wine as a future (2010 Pichon Baron)! Furthermore with respect to his view that storage and insurance costs prohibit the potential for profit, the is correct storage and insurance is essential to protect the provenance and value and security of these wines. The cost of these essential services is very low proportionate to the value of investment-grade wine which can be anywhere from two thousand to many hundreds of thousands of pounds or when compared to the charges that professional investment managers levy. When undertaken professionally investment in fine wine can provide sizeable returns. I have the utmost respect for Mr Parker’s utterances on wine quality but when it comes to investment he needs to trust the professionals.
“How much easier it is to be critical than to be correct.”