Wine Owners – a comprehensive solution to wine management and trading

17th June 2013

Nick Martin founder and CEO of talks about why he set up the website and how it can make the experience of owning, investing in and trading wine all that more enjoyable.

Where we got the idea for

The concept of came about because as an enthusiast and a collector of wine, I found myself facing three challenges. These were –

1/ Keeping on top of my purchases, aggregate spend and current value, further complicated by having wines stored in multiple locations as a consequence of securing wines from different sources.

2/ Identifying what I needed to drink where I’d got carried away and bought too much, what needed selling and what would realise most value at any given time.

3/ Selling on parts of my collection via the secondary market was often a long-winded process, the elapsed time between a purchase and settlement often being weeks or months.

We researched the market and discovered that many other wine collectors were experiencing exactly the same issues. We decided to create a comprehensive solution to solve private clients’ wine management and trading challenges, and so was founded

We saw that most other management and trading solutions focused on the needs of the wine trade. From the outset we set out to meet the needs and delivering value to private clients with a solution designed by wine collectors for wine collectors.

How it works enables the private client to upload their existing wine collections, open a storage account where required, manage and analyse their collection and trade their wines from their portfolios. When you want to add wine to your cellar, there are three methods for doing so.

You can use the Wine Wizard to input wines yourself. You can have us do it for you. If you have an electronic copy on a common spreadsheet programme such as EXCEL or Mac Numbers you can send us the file by email. Finally if you store your wine with a professional storage facility, we may be able to take an electronic feed from the facility detailing your holdings.

We have also just completed a consultation exercise with our users and have incorporated more than 100 improvements since we first launched the service in November 2012. We now include more summary options, a dashboard, enhanced charting and comparison functionality. We have extended user preferences givingclients greater control, easy cellar filtering and brought in additional sort criteria to name but a few of the changes.

In this way, we think everyone from the enthusiast with a growing appetite for collecting through to the seasoned collector gets a total solution for fine wine appreciation and trading. A subscription to the Wine Owners platform is free and enables wine collectors to answer all sorts of questions about their wine collection. These include the following –

How much have I spent to date?

What’s a wine honestly worth if I want to sell it tomorrow?

How have my wines performed?

What should I drink now or at least drink up soon?

What do I have too much of, and what should I think of selling to make room for what I’d like to buy next?

Trading your stored wines via the exchange also ensures fast settlement, within days, rather than the more usual weeks or months. The trading process helps minimise movement of wine, helping to preserve its good provenance and its future value.

When we refer to asset management, we use it to describe the set of activities covering price discovery, review and analysis that make up fine wine appreciation. Price discovery is an essential precondition of any effective market, so asset management provides the transparency and actionable information that are preconditions for private clients to decide what to sell, what to keep, what to drink and what to buy more of.

What regions do we cover?

France is the largest part of the secondary fine wine market and it constitutes most trading on Wine Owners, but our referential database of the world’s greatest 85,000+ wines covers all the great wine regions of the world, including Italy, Germany, Spain, Portugal, Austria, Hungary, USA, South America, South Africa, Australia and New Zealand. The WO 150, our wine index. This covers what you might call blue chip wines, principally from Bordeaux and Burgundy, with some representation from areas such as Northern Italy and the USA.

How does wine compare with other investments?

Wine can offer a medium term return and like other investments the value of fine wine can go down as well. You can always drink wine and derive pleasure from it. Fine wine appreciation is a term that relates to both an enjoyable, social luxury as well as delivering a potential return. Historically wine is not nearly as liquid as other traditional stores of value, which the Wine Owners’ platform seeks to address.

Wine is not fungible, which is to say that two cases of wine are not indivisible, as are stocks and shares. History, storage, tax status and condition are the sort of attributes that make wine a variable asset class compared with stocks and shares or gold.

Businesses that make a living from wine trading are brokers and portfolio managers. But private clients can and do make good returns from wine over the medium to longer term as long as they buy wisely. Our typical clients are people who buy and sell wines, either regularly or from time to time, have other jobs that they depend upon for their principal annual income.

Who uses Wine Owners?

Like most collectible markets, wine collectors are mixed motivators. We believe we have created a platform for enthusiasts and collectors – though they can often be the very same people.

I am a good example of the genre. I am a burgundy lover, own rather a lot of it, but never consider selling after buying, except to a few friends every now and again, when I hit a spike of wine that needs drinking and I don’t have the capacity to do so! If I were to sell burgundies I would have made a spectacular return. I also love other great regions, and enjoy picking up old rieslings whenever I can find good deals for drinking. I also found that I could make some money out of bordeaux when I started to buy better wines in the early 1990s. So I tended to buy more each year for some personal drinking and buy some that could give a potential return. That in turn helped me maintain my burgundy ‘habit’.

Like many others, over the years, my motivations have become mixed. I am passionate about fine wine, and burgundy in particular, but I also like reviewing my wines in the context of the available information on them, and I also buy to sell a proportion of my claret holdings.

We think Wine Owners reflects that mosaic of motivations. Wineowners as a firm doesn’t participate in trading, but exists as a true two-way market making it easier for enthusiasts to sell, buy, search for and source fine wine.

Because Wine Owners caters for enthusiasts and hard core collectors, it isn’t easy to say how often a typical client trades. In a rising market, participants will tend to trade more than in a falling market. They are often flurries of activity, for example, when wines get re-rated by influential wine critics. Typically we’d expect on average about 5 to 10% of the value of a large collection, consisting of several thousand bottles, to be traded each year though the approach of many private investors is very much buy and hold.

Very few collectors are purely interested in fine wine as an investment, and very few are 100% pure enthusiasts, although they may start out as such.

Our pricing tools and graphs gives everyone absolute transparency of current value, performance over time, and comparative performance. Our essential content provides the enthusiast or collector with a library of information which gives them a great basis to acquire even more knowledge.

But most importantly, whatever your level of experience, Wine Owners makes owning, buying, selling and investing in wine all fulfilling than ever before.

This article is sponsored by Wine Owners

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21 thoughts on “Wine Owners – a comprehensive solution to wine management and trading”

  1. Paul C says:

    I liked your reference to the cost of keeping money with the ECB, potentially pushing up lending rates. It is a logical analogy, the outcome for any manufacturing business, input costs go up so selling prices must rise. In a world of Bankocracy as you suggest it may be entirely self-defeating, the pretence is that the central banks are leading the clearing banks whereas the truth could be that the clearing banks are leading the central banks.
    All somewhat pointless in a world where the proles need to be financed and productive we’ve got a monopsony cadre of powerful organisations printing it and hoarding it all between themselves in bubblicious asset vehicles.
    Paul C.

    1. Noo 2 Economics says:

      The original sole purpose of the Central Banks was to support, regulate and protect the banks operating in the particular central bank’s country. They have never lost sight of that primary objective.

  2. arrbee says:

    So one lesson learned from the credit crunch is to move the dodgy asset dealing over to the central banks where tax-payer support is implicitly guaranteed and can be kept below the media radar. Does it also qualify as ‘off balance sheet’ for the government’s financial reporting ?

    1. Anonymous says:

      Hi Arrbee

      The rule for this sort of thing is that losses are never declared until they have to be. Also central banks have profits from other actions and I would not be surprised if a sort of “cross-subsidy” took place, although of course it would officially be denied. For example the recent rises in bond markets would have been very good for the ECB’s holdings…

      So yes everything here would be “off balance sheet” until one has no choice to declare the losses. Then it would be like a new episode of “Surprise,Surprise”

  3. Forbin says:

    Dark times indeed Shaun,

    As I’ve posit before , if negative interest rates ever get to main street you can kiss the banking sector goodbye !

    A fair chunk of London square mile will evaporate as well ( no , not nuclear, financial Armageddon !!)

    I expect Bank closures and other financial controls to be in place before that happens , keep your eyes peeled …..

    The real effect? that piece of wet string keeps getting pushed and it seems no one is noticing , so apart from some overnight deposits , who does help or hurt ? Follow the money ?

    Again it seems our Banking Overlords are getting the cream again, could you imagine the Car industry , or for that matter any bricks $ mortar industry , getting anything like this ?


    1. Anonymous says:

      Hi Forbin

      If the Danish experience is any guide then there may be one or two banks in the Euro area which move to negative deposit rates but not many. However if the Euro area continues on its present trajectory we are likely not to have seen the last interest-rate cut.

  4. Drf says:

    Modern Socialist and pseudo-Socialist politicians are scared to death of disinflation and sound money. They, even with their restricted intellect, fear that such outrage will be the end of their Ponzi scheme (and of course they are, at least in this, correct).

    1. Noo 2 Economics says:

      Don’t think it’s got much to do with socialism-look at the New Zealand Government finances….

      1. Noo 2 Economics says:

        ….or indeed Swedish Government finances.

    2. Anonymous says:

      I’d not accuse Cameroon/Osborne or GW Bush of being socialists – yet they are fiscally incompetent. Noo has beat me to it, but the NZ Labour party is fiscally responsible because they have the courage to tell their voters about the need to control spending. And they can spin it – better to keep the money for teachers than splurge on interest payments to bankers ….

      Good politicians have the courage to attempt to persuade voters the need of balanced budgets. The UK is sadly lacking any politicians fit for office.

      1. Eric says:

        The NZ General Election in a couple of weeks will probably see John Key and the National Party in power again for another term. All this low interest rate-banking bailout-QE stuff is something that only happens on the other side of the world. I think the average kiwi isn’t interested in it; they are much more concerned about how Labour’s proposed CG tax might work.

        1. Anonymous says:

          Good point. There seems to be a marked difference between central banks in the Anglosphere in the Northern and the Southern Hemispheres. I think it is partly due to the Reserve Bank of New Zealand and the Reserve Bank of Australia having the good sense to adopt a net acquisitions approach to owner-occupied housing. It is notable that the Bank of Canada is the only central bank in the Anglosphere in the Northern Hemisphere that has avoided QE, although it still has a very low bank rate. It uses a core CPI measure whose OOH component at least crudely approximates a net acquisitions series, while the US Fed, Bank of England and ECB all exclude house prices from their target inflation indicators.
          Andrew Baldwin

  5. dutch says:

    Great piece Shaun.

    My question to day.Has anyone put together a reasoned argument that the recovery will only begin by raising rates and stimulating spending by stimulating the income of savers-alos possibly increasing the velocity of money?

    I’m sure I’ve seena link on one of your threads but can’t tremember the exact one

    1. Anonymous says:

      Hi Dutch and thank you

      I agree that the impact of the interest-rate cuts on savers and behaviour has mostly been ignored. Accordingly the boost that would be provided if interest-rates rises has been ignored too. However I cannot recall the link you mention, perhaps someone else will…

    2. Critic Al Rick says:

      It is my contention there will be no Recovery; not in the sense of returning to ever-increasing record ‘real’ GDP. Once the Depression has been allowed / forced itself to play-out proper the World will never be the same again. Mankind, whatever remains of it, will have to re-evaluate its priorities, particularly with respect to consumerism and so-called Growth.

      Any Recovery which may take place will be from a very low base; because a firm base, inasmuch as a country is concerned, is one in which its Debt, if any, to the Rest of the World is of manageable proportions whilst its Balance of Payments is in healthy Surplus. Inasmuch as the very low base is concerned, I’m talking in terms of third world ranking.

      My hope is that I will be able to maintain my present standard of living until departure.

  6. Eric says:

    Great stuff Shaun. I especially like the bit about negative rates potentially causing retail rates to rise. We really are in Alice in Wonderland now.

    Maybe the whole idea of ZIRP, QE, bank bailouts, FLS, HTB, FSCS etc., is flawed. Maybe preventing the bust banks from actually going bust and the notion that they were too big to fail has led us down the wrong path. I shudder to think what the true total cost of all this madness amounts too (so far!).

    1. Noo 2 Economics says:

      There’s no maybe about it.

  7. Anonymous says:

    Is the UK making any contribution to these new ECB Euro purchases?

  8. Londoner says:

    You wonder what will happen at the end of it all. French bankers under guillotines in Paris?

    The banks are not fit for purpose. Too much complexity and greed and everyone looking for short term gains for democratic cycles.

  9. Anonymous says:

    Hi therrawbuzzin

    Interest-rates and maybe bond yields do not have much effect at these levels I agree. However exchange rates do have economic power and thereby the choice of currency as I wrote earlier this week.

    On the subject of Scotland you may want to note this piece on Business Insider.

    Below is the bit which I challenged the author about as currently the borrowing rate of the UK is around half the assumption. Even Portugal has a 10 year benchmark only just over 3%.

    “Although it is uncertain exactly what interest rate an independent Scottish government would be able to borrow at, it seems implausible that any small economy that was reliant on foreign investors to help finance its public deficit could continue to borrow at a [UK average] rate of 5% if public sector net debt really was on course to approach 200% by the middle of the century.

    So it should have had graphs at different interest-rates too….

  10. therrawbuzzin says:

    Hi Shaun’
    Unfortunately the part I contend with, is the fact that it is founded on a highly contentious IFS report.
    The IFS may well be independent, but, if you look at its output regarding independence, you will find that it is far from impartial.
    For example, the IFS report takes, at face value, the OBR’s highly dubious, if not totally discredited, forecast for oil revenues, rather than the Industry’s own, or another impartial forecast, which would be substantially higher.
    That being the case, the article has, unfortunately, little value for me, as, although very probably written in good faith, it’s gigo.
    If only there was a “notayesifs’seconomics” that was truly impartial, eh?
    SNP’s plan is for Scotland not to run a budget deficit in the longer term.

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