Investors turn to the bottle in credit crunch
WINE merchants are reporting a boom in sales as savers shun traditional investments in the wake of the credit crunch.
Leading UK firm Berry Bros & Rudd said its sales were up 16 per cent in the first three months of 2008 while stock markets in the UK and elsewhere suffered.
Berry Bros & Rudd’s sales director, Simon Staples, said: “Apart from blips in the early 1990s and at the end of 1997, prices for fine wines have risen astronomically during the past 20 years.
And, if the market does collapse — a real worst-case scenario — you can still drink your investment, whereas a share certificate makes poor eating.”
Wine is classed by Revenue & Customs as a “wasting asset”, and is therefore exempt from capital gains tax. But experts warn that putting money into fine wine may not always be a suitable substitute for a diverse portfolio of shares.
Ben Yearsley from independent financial adviser Hargreaves Lansdown pointed out: “Wine is quite a cyclical market — and it is often linked to things like bonuses in the City. Any downturn there could filter through.”
Berry Bros advises potential customers to invest at least £5,000 to achieve “serious returns”.
The merchant added that the wine should be held for a period of five years, unless the client was advised to sell due to market conditions.
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