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 more than 15 years of experience in trading exclusive and rare wines, extensive market insight, an international trading network and its own warehouse with a capacity of more than 3.5 million bottles of wine. It also has storage facilities abroad, so RareWine Invest can offer anyone to invest in wine at market conditions - so 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?

    Most investment positions start at €2,000, but it depends on the price of the particular wine. We always recommend investing in multiple positions, as this provides more opportunities, better risk diversification and reduces costs. Therefore, most investors start at €40,000.

  • 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, Costs and Administration

  • WHAT IS THE COST OF PURCHASING WINE FOR INVESTMENT?

    The wine is sold at market price*, and the purchase is not conditional on the purchase of other services. Portfolio advice provided in connection with the purchase of wine for investment is included.

    *Market price is not equivalent to the company's purchase price. The market price is assessed as an arbitrage between the sales price obtainable at a given time in the professional market and on the basis of internal and external trading data.

  • WHAT IS THE COST OF SHIPMENT?

    Delivery to Nordic Freeports account at a bonded warehouse is included, while delivery in Denmark and the rest of Europe is possible subject to payment of customs duty, tax, VAT and shipping costs.

  • WHAT ARE THE ONGOING COSTS?

    Investing in wine usually involves insurance and storage costs. Assuming the use of RareWine's storage solution, these represent 0.7% of the portfolio value per year. In this way, the wine is stored in documented, optimal conditions in Europe, and you avoid it losing value or being damaged. In addition, the wine is always insured at the rate of 110 of the latest valuation.

  • 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.

  • VALUATION OF PORTFOLIOS

    On the investor portal, MyRareWineInvest, the estimated value of your wines will be updated continuously. The value is an indication that reflects the current availability based on asking prices and trade data from third-party providers such as the UK wine exchange, Liv-ex, and wine-searcher.com. In other words: We help you always keep a complete overview of your wine investment.

    The price indications on MyRareWineInvest are based on trading data from various sources and are, therefore, only indicative. The actual market price may vary from the data-based price indication.

    Day-to-day individual transactions can cause fluctuations in the data that do not represent the actual market value. This is why our specialists manually value your wines when you wish to realize a position, allowing us to provide you with the best possible guidance for an efficient sale.

    This procedure is in place to create security and transparency when investing through RareWine Invest.

  • KYC / AML

    In order to offer a responsible service, RareWine Group complies with applicable principles of KYC / AML (Know your customer / Anti money laundering). This means that we will ask you for identification when you create an account and portfolio with us.

  • Sale Of Wine / Divestment

    When you want to sell single positions or your entire portfolio, RareWine Trading can effectively sell it to our global network of traders, clients, collectors etc.

    To ensure transparency when selling your wine or spirits, all trades are revised by a third-party instance (Deloitte), guaranteeing stated sales prices is corresponding to the actual sales prices.

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 RAREWINE INVEST OFFER STORAGE OF WINE?

    Yes. In addition to storage capacity with international partners, RareWine Invest has its own public bonded warehouse for wine and spirits in the EU (Denmark), which operates as an independent company under the name Nordic Freeport. Nordic Freeport has the capacity to store more than 3,500,000 bottles of wine under optimal conditions.

  • IS THE WINE INSURED?

    If your wine is stored with us, it is of course insured. In the event of loss or damage, the wine is either re-acquired or replaced at the rate of 110 % of the latest valuation.

     

     

     

  • IS IT POSSIBLE TO INSPECT ONE’S WINE?

    Yes, you can inspect your investment at any time by prior appointment. All you need to do is contact your portfolio advisor and make an appointment. NOTE. For logistical reasons, your portfolio may be spread over several locations depending on where it is at the time of purchase.

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.

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

    In the event that RareWine Invest ceases operations or goes bankrupt, this is of no consequence, as you as the investor own the wine and the operation of the storage facilities will continue unchanged.

    All goods stored through RareWine Group are clearly marked with the owner's unique customer ID, thus ensuring the investor's ownership at all times - even in the event of bankruptcy.