You had me at Merlot: How to turn your favourite tipple into a money-making drop

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In the wide and wonderful world of investing, the Venn diagram overlap of “things you can invest in” and “things you can consume” is, unfortunately, tiny. Yes, theoretically, you could eat gold, and yes, theoretically, the beer you buy from the brewery you have shares in could be considered an investment. But by and large the numbers on your spreadsheet cannot be eaten or drunk.

However, there’s one notable exception to this: wine. Along with classic cars, coins and trading cards, wine is one of the most popular of the “alternative” investments favoured by those looking for somewhere to put their money other than the usual suspects of bonds, equities and property. It’s also delicious.

Wine: Delicious and an investment worth considering.Credit: Michael Howard

According to Knight Frank, last year, 45 per cent of financial advisers said that wine was an increasingly popular investment among clients, falling just behind art and cars. Over the past 10 years, the wine investment market has grown a whopping 146 per cent.

What’s the problem?

But though you might enjoy a few glasses on the weekend, getting across the best vintages to buy that can hold – or increase – their value can be a lot to learn.

What you can do about it

So if you’ve ever been curious about putting some money into a fine bottle or two, read on:

• How to get started: Like any good investment, the first thing you should do is sit down and get across the key wine producers, regions and vintages, says Michael Anderson, head of auctions at specialist wine seller Langtons. Anderson says the wine market – like most markets – can be volatile and subject to sharp corrections, so spending time to get acquainted with it in-depth can be worthwhile. He recommends resources such as the Bordeaux Classification, or Langtons’ own guide, as good places to start. Having an idea of what sorts of wines you like, and from what regions, can make your purchases more meaningful.

• Can I just go to the local bottle shop? Unsurprisingly, Anderson is a big proponent of buying fine wines at auction, and he notes that for most rare vintages or unusual bottles, auctions are your only option. However, he says you can still find many high-quality wines at high-end bottle shops. “Australia’s capital cities are awash with wonderful wine stores that sell great cuvées from the world’s top producers,” he says. “Each independent store will offer a different array of wines, depending on what the owner likes and doesn’t like.” For those looking to go down the auction path, you can sign up and bid on bottles online, much like you would on eBay. Just don’t forget to do plenty of research before you buy, Anderson says, and make sure you factor in additional fees such as shipping and buyer’s premiums.

• Have space for it: While ETFs and bonds won’t take up any space in your cupboard, 24 bottles of wine will, so think about how you might store them, and in what sort of environment. Also, unlike other investments, wine can break or go bad, so take plenty of care. It can also affect its resale value, Anderson says. “Fellow investors are looking for wines that have been stored properly, so don’t skimp on storage as it’ll come back to hurt you in the long run when a wine spoils,” he says.

• What sort of returns can you expect? As always, the answer to this question is “it depends”, and Anderson says not to expect handsome returns on wines plucked from shelves in your local big box wine shop. However, well-researched, rare wines can net you returns in the tens of thousands. Plus, if it all goes pear-shaped, you can always just drink it!

• Consider wine-adjacent investments: If you’re a big wine fan but don’t love the concept of investing in the bottles themselves, consider instead investing in shares of wine companies, with Treasury Wine Estates, maker of the famed Penfolds line, listed on the ASX. You could even go a step further and buy shares in a vineyard, though that’s a far more complicated and expensive endeavour.

Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.