Andrew on Wine Investment
Andrew Gordon talks to Edwin Soon about wine investment for Singapore's Appetite Magazine.
‘There are collectors and there are a speculators,’ says Andrew Gordon, who runs a wine brokerage in England called Private Cellar. I met him in the early 1990s when he was the sales director for the esteemed Corney & Barrow wine merchants in London. By the time he left the company three years ago to start his own business, he had built up the business 10-fold. ‘The worldwide redistribution and expansion of wealth in recent years has certainly brought about increased buying of fine wines amongst individuals. The substantial growth in their value is stimulated by the following factors: the supply of fine wine is limited. Each year, the quality of wine produced is subject to weather conditions. In every decade, only certain years are declared to be great vintages. Rising demand provides an immediate basis for the increase in value. Every vintage is unique and over the years, as wines of a certain vintage are consumed, supply diminishes for that vintage. So there is a direct correlation between the quantity of a rare wine and its value.’
While wine investment is a way of collecting wines, Gordon is concerned about speculation from non-wine lovers. ‘When financial speculators enter the market, all they are interested in is the returns. Index wine funds will try to beat the stock indexes; and there will be a lot of money chasing fewer wines. Fake wines have emerged in the previous years as a result. And when the speculators cash out, you can imagine what will happen to the market.’
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Edwin Soon - Wine Investment 350.34 Kb
