Gianni Agnelli was once quoted as saying:

"I prefer to invest in wine than in shares listed on the stock exchange: if the investment goes badly, I can drink it, with the shares I can't do anything about it."

Recent surveys have shown, unsurprisingly, that people have drunk more wine during lockdown. It has also been reported that many are also choosing more expensive bottles, perhaps due to postponement of family holidays and a reduction in travel costs.

Global interest in the wine and spirit market has increased in recent years with some experts quoted as stating that current investment potential ranks second only to fine art. The Knight Frank Luxury Index bears this out with significant medium to long term returns.

Wine as a perishable asset is also not subject to any specific tax legislation so there is minimal, if any, capital gains penalty. You should however seek professional tax advice in relation to any potential investment.

Many auction houses have switched to online sales platforms while physical sales remain suspended. As with other collectable items, such as motor cars, fine art and jewellery, sales results appear relatively strong throughout the lockdown period.

Collections of wine or spirits can be insured in the same way one insures fine art or other collectables. You will have spent years putting the cellar together, now is the time to protect it properly.

Is your wine collection properly insured? What happens if you suffer theft, fire or just a sudden breakdown in the temperature control unit? Have you checked your current insurance policy to see if you would really be covered? Depending on what type of household coverage you have, your wine collection may not be fully protected.

Taking care of your collection

There are some simple steps to ensure you take the best possible care of your collection:

- Wine stored with the first rack or case should be a minimum height (pallet height) from the floor of the cellar.

- Up to date valuations within the last 3-5 years; it is best to get the collection indexed annually by the valuer.

- List the wine/spirit collection on the insurance schedule, removing the risk of any dispute of value/description in the event of a loss.

- Keep a detailed cellar plan and map in the event of a loss/flood in the cellar in a separate location.

- If possible, use plastic labelling on racks rather than paper labelling.

- When wine is purchased and shipped, check the level of cover and insurance responsibilities of specialist transporter. 

- Check with wine storage company (e.g. in bond) the level of cover and responsibility of insurance

- Up to date servicing of the temperature control units.

- Maximum and minimum thermometers can be very useful for monitoring potential places to store wine.

- Storage /cellars should have no direct sun light or near causes of strong vibration.

- No other items with strong smells to be stored in same area, paint, chemicals etc.

What is covered

 A wine / Spirit collection policy will be on a full “All Risks” basis including the following cover;

• Accidental damage.
• Wine & spirit collections
• Agreed value for specified items
• Loss of label cover in the event of a flood/ loss in the cellar
• Sudden change in temperature, breakdown of temperature control unit
• Whilst in transit
• Loss or stolen
• Worldwide basis
• No excesses
• Automatic cover for new acquisitions
• Inflation cover – this can be referred to as Extended Replacement, Increased Value or Appreciation Cover. Some insurers, if the valuation has been carried out in the last 3 years, seen & agreed by insurers, will offer increased value of 25% - 125% in the event of a claim due to the market movements between valuations

Whether you already have a wine collection or starting to build one, Lockton Private Clients recognises the passion that drives us to collect assets. We share that passion and it drives how we work with you.

Our approach is to focus solely and precisely on you; to get to you know you and your collection, why you have bought them and how they will be stored. We work with the very best experts and valuation companies, who can assist you in providing accurate limits for your collection, to ensure if the worst were to occur, you receive a settlement that reflects its true value.

When it comes to arranging your cover, we adopt a pragmatic method. We work with a variety of insurers to produce a solution which accurately meets your requirements and suits you and your collection.

If you have any questions about your current collection, we're here to help.