What are the risks of investing in wine?

As with any investment, you need to know the market well to be able toinvest in wine on a long-term basis.

The main risks are

- Buying above the market price on acquisition

- Not taking account of value-added tax and commercial costs on resale in your calculations

- Expecting a return on investment of less than 3 years.

When you invest in wine, you are making a long-term commitment. Even if it is possible to achieve a rapid return on investment if you know the market very well and follow market trends closely, it would be a mistake to base your investment strategy in this sector on the short term. Investing in wine involves risks that are crucial to consider. Investors, attracted by the prospect of capital gains over the years, need to assess the quality of the wine and its financial potential.

In practice, by diversifying your cellar, taking the time to monitor market prices and trends, and taking a long-term view (i.e. over 5/10 years), you can be fairly sure of not making a mistake, and you can easily self-finance your cellar or generate a substantial capital gain, depending on your preference. The French wine market offers a variety of investment vehicles, from investment cellars to auctions. However, the financial risk remains, particularly with market fluctuations and the risk of capital loss. The conservation of wine requires particular attention, with criteria such as humidity levels. Before investing your money, a thorough analysis of the market, purchase prices and en primeur sales is essential to minimise the financial risks associated with this type of investment.

On the other hand, beware of players touting reliable annual returns of between 5 and 10%. It is absolutely impossible to guarantee such a return while allowing you to withdraw your stake at any time. Very often there are hidden conditions or a lack of transparency in the purchase and resale processes (hidden charges or concealed VAT, for example).