Frequently Asked Questions

Below you can find brief answers to most questions about investment in wine, including why wine is a good investment, the expected returns on your investment and how to invest in practice.

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FAQ

Wine as an Investment

  • WHY IS WINE A GOOD INVESTMENT?

    Constant production, increasing demand owing to growing interest and purchasing power, falling supply due to ongoing consumption, increasing quality as the wine matures and annual price increases for new vintages means that the price of fine wines increases over time, meaning that wine can serve as an investment.

  • WHAT ARE THE CONDITIONS FOR INVESTING IN WINE?

    Investment in wine requires a broad knowledge of both wine, and wine trading is dependent upon purchases and sales being made at attractive prices and presupposes the correct storage of the wine. Historically, wine investment has been limited to large wine collectors and professional wine merchants.

    RareWine has over ten years of experience in trading in exclusive and rare wines, extensive market insight, an international trading network and its own warehouse with a capacity of over half a million bottles.

    This means that RareWine Invest can offer everyone the opportunity of investing in wine on market conditions so that everyone can participate.

  • WHICH WINES ARE SUITED FOR INVESTMENT?

    In principle, only large vintages of top-notch wines commended by wine critics with storage potential from well-known and renowned producers are suitable for investment, and hence less than 0.1% of global production qualifies as investment wine.

    Furthermore, investment should preferably be made in wines in a perfect condition in whole cases that have been stored correctly – further, the wine must, of course, be priced attractively in relation to both the market in general and similar wines.

  • WHAT SHOULD YOU BE AWARE OF WHEN INVESTING IN WINE?

    RareWine Invest knows the pitfalls and will be pleased to assist you with everything from investment advice, the composition of portfolios, the purchase of wine at the market price without excise and VAT, storage in a bonded warehouse, on-going advice and the purchase and sale of wine.

    Unless you are professionally engaged in trading or investing in wine, you should seek the best professional investment advice and be aware of the costs of advice, purchase/sale and on-going services.

Return, Strategy and Risk

  • WHAT ARE THE RETURNS THAT CAN BE EXPECTED WHEN INVESTING IN WINE THROUGH RARE WINE INVEST?

    Based on our in-depth knowledge of the wine market and a solid investment background, we would expect that a long-term investment in wine provides an annual return of more than 8 % with relatively small returns in the first years and larger returns over time.

    Historical returns are no guarantee of future returns and returns in practice might deviate from expectations. We draw your attention to the fact that the returns on investment in wine could be negative.

  • HOW MUCH SHOULD YOU INVEST?

    The minimum investment is EUR 10,000, but we would recommend an investment of at least EUR 40,000, as this will provide you with additional opportunities regarding the selection of wines to be invested in, ensures better risk distribution and reduces the costs.

  • WHAT IS THE RECOMMENDED INVESTMENT HORIZON?

    We recommend an investment horizon of at least five years as a longer time horizon provides more stable returns and lower risk. Investments with shorter time horizons are possible, and high returns can be obtained in a short time, but, due to the shorter period, the risk is larger. With a few exceptions, no significant return should be expected for the first year or two.

  • WHICH WINES ARE INCLUDED IN THE OPTIMUM PORTFOLIO?

    To obtain the maximum return at the lowest risk, we recommend that you put together a broad portfolio with different investment wines. This includes, in particular, younger immature wines and, to a lesser extent, mature vintages, primarily from Burgundy and Champagne, some Italian, American and German wines as well as selected Bordeaux wines, liqueur wines and spirits.

    A characteristic that should be shared by all the wines is that, in addition to living up to the investment wine criteria, they should also be drunk on an ongoing basis and only be the object of speculation to a lesser degree - which is especially the case for younger immature wines.

  • WHAT IS THE RISK OF INVESTING IN WINE?

    Historically, investment wines have provided a higher return and have been subject to a substantially smaller risk than stocks, and, for the past ten years, the risk-adjusted return on investment for wine has been higher than that of stocks.

    The largest risk factors related to investment in wine are poor advice, excessively high purchase prices, incorrect storage, excessively low selling prices and excessively high on-going costs.

     

Prices and Costs

  • WHAT IS THE COST OF PURCHASING WINE FOR INVESTMENT?

    The wine is sold at the market price without any addition to trading costs or brokerage, and the purchase is not subject to the purchase of other services.

    Investment advice provided in connection with the purchase of wine for investment is included.

  • WHAT IS THE COST OF SHIPMENT?

    Delivery to the bonded warehouse at Nordic Freeport in Vester Hassing, north of Aalborg, is free, whereas delivery to Denmark and the rest of Europe is possible subject to payment of customs duty, excise, VAT and shipment costs.

  • WHAT ARE THE ONGOING COSTS?

    In principle, investing in wine is associated with insurance and storage costs. Assuming that Nordic Freeport is used for storage, the price is 0.5-1.0% of the portfolio's value annually. In this way, the wine is stored under documented, optimal conditions and you avoid the risk of losing value or damaging the wine. Furthermore, the wine is fully insured.

  • WHAT IS THE COST OF SELLING THE WINE?

    We recommend that you sign a pre-agreement with RareWine on consignment sales, thus obtaining an advantageous consignment rate of just 5-10% of the sales price. That way, we have a mutual interest in getting the highest possible price for your wines - it's both easy and safe.

    If you do not choose a consignment agreement with RareWine, you can sell the wine yourself. In case of self-sale, the entire sale price accrues to the seller. However, be aware that sales through conventional auction houses typically entail costs of 30-40% of the sales price and are associated with a number of operational risk factors.

Storage

  • HOW SHOULD WINE BE STORED?

    Wine must be stored horizontally at a constant temperature of about 12 degrees at a humidity level of around 75% and may not be exposed to direct sunlight or vibrations.

  • CAN RARE WINE INVEST OFFER STORAGE OF WINE?

    Yes. RareWine Invest has at its disposal Denmark’s only public bonded warehouse for wine and spirits, which is operated as an independent company under the name of Nordic Freeport, and a storage capacity of over 500,000 bottles of wine under optimum conditions.

  • IS THE WINE INSURED?

    Wine stored at Nordic Freeport is of course insured. In the case of loss or damage, the wine is either re-acquired or replaced at a rate of 110 %.

     

     

     

  • IS IT POSSIBLE TO INSPECT ONE’S WINE?

    Yes, Nordic Freeport is open between 10:00 and 15:00 on all working days, and inspection, delivery and collection of wine is possible during those hours, but at a minimum of one working day’s advance notice.

Ownership

  • WHO OWNS THE WINE?

    As an investor, you purchase the wine and accordingly, you are the owner of the wine.

  • CAN I CHOOSE TO SELL OR DRINK MY WINE?

    Yes, as the owner of the wine, it is entirely up to you whether you want to sell or drink the wine. Please note, however, that if you have entered into an agreement about consignment sales to obtain an attractive price for subsequent sales, a penalty similar to the consignment agreement must be paid if you choose to drink the wine.

  • HOW ARE MY RIGHTS OF OWNERSHIP ENSURED?

    Each investor is granted a unique customer ID upon storage of the wine by Nordic Freeport.

    The wine is packed on one or more pallets that are clearly marked with the customer ID and clearly labelled as being owned by a third party with reference to the customer list.

    The investors’ wines are never mixed, and pallets never hold wine from more than one investor.

  • WHAT HAPPENS IF RAREWINE INVEST OR NORDIC FREEPORT CEASES OPERATIONS OR GOES BANKRUPT?

    If RareWine Invest ceases operations or goes bankrupt, it is immaterial because, as an investor, you own the wine. The operations of Nordic Freeport can, therefore, continue unchanged.

    All goods stored at Nordic Freeport are clearly marked with the owner’s unique customer ID and, thus, the investor’s property rights are ensured at all times - also in the event that Nordic Freeport should go bankrupt.