Grape expectations for investors in fine wines(1)
Barry Rollins and Gavin Butterworth of wine investment company Fine & Co
A new Belfast-based company is advising clients how to place their hard-earned cash in bottled gold, in a bid to steer clear of volatile trading conditions of traditional markets
Gold, silver, oil - and wine?
Despite having the image of being more fond of the black stuff than the red or the white, Northern Ireland has a growing and ever-vibrant wine scene and now a new company has been established in Belfast aimed at urging investors to put their pounds into plonk.
Fine & Co recently set up shop at the Scottish Provident building and already has 30 clients in Northern Ireland.
With a current staff of three employees with over 40 years' experience in trading in fine wine, the 'investment consultancy' aims to offer "everyone from novices to seasoned investors" a chance to invest in and hopefully enjoy good returns from a market which it is claimed is virtually "recession-proof".
Returns on wine were 40% in 2010, with this year also showing strong growth with very little volatility, mainly due to the boost in popularity in the Asian market.
Managing director Barry Rollins comes from a background in the wine industry and worked with brokers in London before coming home to Northern Ireland to help advise homegrown enthusiasts on where to put their money.
"I've worked in Spain and France, more recently in London and the Northern Ireland investor does not have great deal of access to this market," he said.
"I decided to come back to Northern Ireland to offer people the same services here that they could avail of in London," he said.
So why wine?
"Wine has for many years proved a safe and dependable market to invest in. It has out-performed a lot of the traditional markets.
"People are understandably concerned about the current European economic climate and the impact that is going to have on bonds, pension and shares.
"That volatility does not suit a lot of people. Even people who are more willing to take risks do not want to put all their eggs in one basket and we do not encourage any of our investors to put all of their money into wine.
"Wine does not have that element of exposure, with the right wine you get a decent return, certain chateaux are very resilient and the correlation between the financial markets and wine is very small.
"Fine wine is tangible asset and a luxury product - something that will always sell."
Barry said that one of the first hurdles for enticing new clients is combating the elitist imagery of the fine wine market.
"People have this image in their heads of the way things were years ago, the landed gentry living in stately homes, going down to the cellar and producing a bottle of Chateau Lafite for their friends around the dinner table to quaff," he said.
"However they are not the only ones consuming and buying fine wine any more. North America became a huge market and now we are seeing massive demands from China, India, the South Americas.
"There is no doubt that fine wine still does have an elitist image - but investing in it is not elitist. Not many of us can afford to buy and open and drink a £1,000 bottle of wine every day - but invest in it, and some day you will make a profit from it.
"Investing in art or gold, doesn't mean you have to walk around with a Picasso under your arm or chains around your neck - wine is a commodity."
"France is still the biggest region in which the investments are being made. Around 90% of the wine we deal with comes from Bordeaux.
"The best chateaux, what we call the top five, always deliver consistently. Like having shares in British Airways or BT in your portfolio, they can go up and down but over the long term, they will always perform well.
