People who are passionate about wine will understand that there’s a dissonance between loving to drink wine, and collecting wine. Having a well-stocked wine fridge is one thing. But if you’re someone like investment-banker-turned-wine-trader Matthew Starr, loving and collecting fine wines will eventually lead you to a harrowing question — what happens when you’ve purchased so much wine, you’re unlikely to be able to consume it over your lifetime?
Luxury wines, aside from their gastronomical value, are commodities that can be traded. Like fine art, wine has a firm place as an alternative investment category. Starr realised, however, that the market itself wasn’t favourable to likeminded individuals like him who wanted to invest in wines without having to deal with large costs, or the potential for sloppy practices affecting the returns. Armed with a background working with fixed income in emerging markets, as well as a near endless repertoire of wine knowledge, Starr began WineBourse, an online trading platform for fine wines.
“The issue with investing in wine,” explained Starr, “has always been the high costs that come with entering and exiting a position. WineBourse has solved this by charging three percent commission — a fraction of what it costs to trade on usual market platforms, and it’s completely transparent.”
Starr wanted to implement the standards one sees in major markets to the wine market. All information on a particular wine is made available online, including its individual rotation number, so there’s never any confusion about their ownership.
“There have been too many situations where because of a lack of detail and security, people have lost money. It’s bad news for the industry when poor methods affect the credibility of fine wine trading as a whole,” remarked Starr.
It’s a highly efficient platform that allows private individuals to trade and invest in six different currencies — USD, SGD, Euros, Francs, Pounds and HKD — ensuring no discrepancy ever occurs between foreign exchange rate fluctuations and the profit one would make. All wines under WineBourse are also stored in a third-party bonded warehouse, with the proper environmental factors to keep the wines in top condition.
With the ever-growing interest in luxury wine collection, people are more willing to get their feet wet with wine investments, and something like WineBourse is an ideal platform for that to occur on a buyer-to-buyer level. “When investigating the market, I realised there wasn’t a mechanism for private individuals to be able to sell their wine efficiently. WineBourse was born from this lack,” said Starr.
If you’re someone who has considered the idea of turning your personal love for wines into a source of income, or have a substantial enough collection to profit from, give this avenue a try. Starr himself has proffered our readers with 5 essential things to note before investing in wines. Here they are: