Investing in wine is a growing trend in Asia
WINE appreciation may have been imported from the West, but Singaporeans and Hong Kongers are now the biggest buyers per capita of premium wines for investment, according to a wine brokerage.

"Consumption and the appreciation of fine wines in the region have increased significantly in the past three to five years," said Mr Jeremy Kasler, a director at Australian Wine Index (AWI), which provides sourcing and investment advice for Australian fine wines.

This is probably due to the larger number of wine lovers per capita in Singapore and Hong Kong compared to Western countries, and Asian wine lovers tend to go for the best when it comes to investing in them, explained Mr Kasler.

"That trend is expected to continue and to include huge growth markets such as China, where consumption is expected to increase at a rate of about 35% per annum over the next 10 years," he told TODAY.

The growing demand in wine investing in Asia is one reason why the Australian company, set up in 2002, moved its headquarters to Singapore two years ago. AWI has some 1,000 clients in the Asia-Pacific region today, with more than half of them in Singapore alone.

"We charge a 5-per-cent brokerage for the resale of wines bought from us. This compares very favourably with auction houses, which charge between 10 to 17.5 per cent," said Mr Kasler.

The most expensive wine AWI has sold is Penfolds Grange - one of Australia's most highly regarded wines. These "vertical" collections - comprising one bottle from every year made in 1979 to 1999 - have been sold for $51,480. Such blue chip wines historically fetch a return of about 12 per cent, said Mr Kasler. Clients of AWI invest a minimum of $10,000 - including shipping, insurance and three years of storage. The wines are stored at AWI's temperature-controlled warehouse in Boon Lay Way. The 10,000-sq-feet Cougar Logistics warehouse now stores about $15 million worth of wines.

When the wines are ripe for sale, AWI helps its clients to place their wine portfolios on international markets such as the US and Europe, and sometimes through auction houses such as Christie's and Sotheby's.

One ardent wine investor is Mr Curtis Montgomery, the founder of finance and investment website WallStraits.com. The good thing about wine investing is that it hardly depreciates in value over time, he said.

"Wine is an interesting alternative to stocks. It helps to reduce the volatility of your overall portfolio of stocks," said Mr Montgomery at a recent seminar held by AWI.

AWI provides its clients with regular updates on the capital growth performance of their wine portfolios. "Buy" or "sell" recommendations are made to clients based on sales figures from auctions or retail prices worldwide, the performance of the wines' past vintages and international reviews and ratings given by influential wine critics.

"The value of a premium wine goes up every time someone pops open a bottle," said Mr Montgomery, who added: "If you choose the right wines, you can get a potential of 10 to 12-percent capital growth each year."

AWI chooses wines with good ageing potential and tracks collections of promising wines selling below market value.

"To identify the winners, we consult with our influential tasting panel to identify the noteworthy wines. We are very vintage- specific when we invest," said Mr David Choo, sales director of AWI.

Investors should also get into the act as early as possible in order to be able to purchase the wines at attractive levels. This is similar to buying good stocks at low prices, said Mr Montgomery.

AWI allows clients to "withdraw" their wines, subject to tax and delivery charges. Mr Kasler said: "Many of our clients enjoy drinking some of their profits.