Is Wine Investment Immoral? Part two of two

In part one, we considered whether spiralling wine prices could be blamed on wine investment, and the answer was no — or at the very least, not in isolation.

Next comes the issue of wine’s purpose, and whether that comes with any moral obligations. Historically, people collected wine because they loved it, first and foremost. Buying wines on release — or even pre-release, as in the en primeur system — wasn’t just a way of getting the best price, it was part of a hobby: studying prices, attending tastings and reading reviews was all part of the appeal, as is cellaring the wine for many years and monitoring its development. There are still lots of wine lovers who buy like this, for whom the idea of buying wine purely as a financial asset would be distasteful — as wine lovers first and foremost they see wine as for drinking, not speculation.

They are, generally speaking, an older generation.

Whereas younger generations like Gen Z and Millennials are drinking less alcohol in general and are therefore less likely to engage with wine collecting. Yet an intriguing reverse trend has been observed as these demographics reach the stage of life where they have spare money to invest.

The historically high returns from wine investments are attractive to these new investors, who can put their money into wine funds dispassionately; not for the love of wine but for an expectation of high returns — and, in the UK, no capital gains tax, since wine is classified as a wasting asset.

Then, as soon as they actually own such venerable bottles, it can trigger an interest to learn more, according to some accounts. This means that wine investment might just provide a source of the young blood that wine needs to sustain interest. This bodes well, especially when ‘96% of British wealth managers expect demand for fine wine to grow in 2025, more than any other luxury asset’, according to a story in Harpers Wine & Spirit.

Labelling wine investment as immoral because it seemingly goes against against the purpose of wine as a drink is clearly too simplified. And for those that still question the morals of wine investment, what about the houses, pensions, ISAs, bonds or shares that they will most likely own? All of these ultimately depend on speculation: that the price of certain things will reliably increase over the longer term. Why should wine be any different?

From fraud to footprint

Does wine fraud offer a more straightforward moral conclusion? Criminals that exploit wine investors with their fake products are immoral by most sensible definitions. Yet even here, there’s a lobby saying that the extreme wealthiness of victims such as Bill Koch means that sympathy should be limited; that the moral consideration is somehow diluted by the relatively low impact it has on their fortune — but the flaws in this argument are easy to see.

Instead, perhaps there’s a moral consideration for the high carbon footprint of wine investment. Glass bottles are notorious for consuming lots of energy both in production and transport; then there’s the need for continuous climate control to keep the wine in optimal condition as it matures, sometimes for decades. As investment becomes tokenised by the blockchain, there’s an additional question over the energy consumption required by the underlying technology.

Then again, blockchain efficiency is already being improved with proof-of-stake networks such as Ethereum. And while wine investment certainly has an environmental cost, the same can be said for almost any consumer product. Solving such fundamental infrastructure problems is as much a question for government as it is for individuals.

Morals, uncorked

So, what is wine for? Is it purely a drink to delight the senses and intellect, regardless of price? Is it simply fermented grape juice that only suckers pay big bucks for? Or is it just an asset class like art or diamonds or anything else collectible?

Depending on the scenario, wine is all of those things. Each of them brings different moral considerations, but there is nothing intrinsically immoral about investing in wine. It has already become an integral part of the wine trade, and as blockchain technology makes it more accessible, the importance of wine investment looks set to increase.

At least those who still question its morality have plenty of wine to drown their sorrows.

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