Investment wine

Neil Pendock October 11, 2008 1

With stock markets dropping like flies, I was browsing my sent mail items and noted that a year ago I was offered a commission to write a supplement on SA investment wines for a major financial magazine. I declined as I thought then, and as I do now with hindsight knobs on, that SA wine is not a viable asset class. There are several reasons for this:

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Absence of a secondary market

Do SA reds improve with age? – ask Alan Pick. Where are the much-touted ’95s today?

Are SA reds good enough to collect? – influential foreign wine writers say no. I would disagree, but perception and marketing is all;

Is there any respect for age? – restaurant wine lists seem happy to offer current vintages;

Nederburg Auction volumes and prices are static at best (and down 10% this year with unsold lots galore);

Moribund commercial (Sotheby’s) wine auction scene, even WINE magazine abandoned its classified section.

Absence of en-primeur offerings

Kanonkop ran a scheme for several years – now defunct;

The third world SA distribution systems results in manipulation and price fixing with the maiden vintage of Vergelegen V was cornered by a Sandton restaurateur;

Large retailer markups translate to high initial charges;

Quite a few SA reds carry sticker prices of R500 and up – just how much higher can they go?

Shortage of collectable icon wines

Yesterday’s hero can be tomorrow’s zero – does anyone remember Veenwouden today?

Current big names like Cape Point, Tokara, Morgenster and Beyerskloof were unknown a decade ago;

SA oenophiles prefer foreign (French and Italian) brands;

Barkers and shills trading as wine writers have muddied the waters, making recommendations suspect.

One Comment »

  1. Lorenzo October 12, 2008 at 10:48 am -

    i see you’ve also picked up on this trend:

    http://melgab.co.za/blog/lorenzo/2008-10-10/cellars_market_fine_wine_investing_on_the_rise

    there is definitely a shortage of SA investment wines. personally, i would like to see more local white wines made to age:

    http://melgab.co.za/blog/lorenzo/2007-11-29/quality_white_wine_ages_better_than_red

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