Is Wine Investment Immoral? Part one of two
When I worked at Majestic Wine in the early 2000s, one of my colleagues bought a six-pack of Penfolds Grange and sold it on the open market not long afterwards, almost doubling his money.
I was scandalised! Wine should be about craftmanship, history and appreciation but this was nothing but pure profiteering! And why hadn’t I thought of that?
Buying low and selling high is nothing new, after all, assuming you have the money in the first place. Back in my Majestic days, I didn’t have the spare cash to buy Grange, and perhaps that’s why I saddled up my high horse: because wine was being used by people who already had money in order to get more money.
That is a good definition of wine investment, after all, because it’s a good definition of all investment. If that makes investing in wine immoral, then the simplest response might be blame capitalism as a whole.
Yet wine investment is still considered distasteful by many in the wine world. Part of the reason is spiralling wine prices, putting the world’s top wines out of reach of most wine lovers. A side-effect of those high prices is an increase in fakers and fraudsters that try to pull off a quick, high-value scam. Similarly, there are more than a few examples of dodgy companies offering bogus wine investment deals who promptly disappear.
On the other hand, maybe wine prices are simply reflecting market forces just like any commodity — in other words, capitalism again. Or maybe the problem is as much caused by greedy producers inflating their release prices as it is by speculators.
Like all moral conundrums, there’s no easy verdict on wine investment.
I rest my case (of Grange)
Two of the main arguments on the morality of wine investment concern whether it disproportionately inflates prices and whether it corrupts the wine’s true purpose. We will consider the former now, and the latter in part two.
Take the poster child of Burgundy, the single-vineyard monopole of Romanée-Conti from Domaine de la Romanée-Conti. The 2022 vintage of this wine was recently released in the UK at £4,250 per bottle, which is 33 times higher than the release price of the 1990.
While costs will have increased during that time, there must be huge improvements to the producer’s profit margins — after all, production volume won’t have changed much. In fact, according to its exclusive UK importer (as quoted in Decanter magazine) the 2022 vintage of this wine enjoyed ‘wonderful abundance’ compared to the ‘tiny’ 2021 vintage — yet the release price was exactly the same.
This sounds like pure greed on the behalf of the producer until you realise that just one year after its debut, the 2021 vintage is now being sold by Arden Fine Wines at £21,600 per bottle — almost five times higher than its release price. If this is the price that the open market can apparently support, then why shouldn’t its maker get their fair share?
After all, when release prices stay low, it’s not long before savvy operators snap them up and flip them for a tidy profit, just like that case of Penfolds Grange — which also explains why wines such as Romanée-Conti are sold on strict allocations to trusted customers.
Meanwhile, in Bordeaux …
The counter example is in Bordeaux. Here, there are producers who grossly miscalculate the market when setting release prices for the annual en primeur campaigns, when merchants and wine lovers have the first chance to buy a new vintage from the most fêted châteaux.
Château Pavie released its 2018 vintage at nearly £300 per bottle — a bargain compared to Romanée-Conti, perhaps, but it’s now trading at only £188, according to Liv-Ex. Another famous St-Émilion estate, Château Angélus, increased the price of its 2023 vintage by almost one third, making it more expensive than many older and arguably more desirable vintages such as 1996, and therefore meeting with a decidedly lukewarm response from the market.
While wine investment might account for some of the pace of price changes, the laws of supply and demand are surely the primary drivers. Examples such as Romanée-Conti show that some prices have indeed increased exponentially, making them unaffordable to many aficionados, but there are countless other wines on the market that still offer excellent value for bargain-hunting drinkers.
The idea that wine should somehow be immune to the influence of the free market is just not realistic. Some people will buy Penfolds Grange to drink, others will buy it to sell.
And that raises the question of what wine is really for — which is our theme for part two of this article, coming soon.
