Buying Wine Overseas

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investing in wine
Genia Jones
Content Specialist
Genia is a writer for FXcompared. She has over 15 years of experience working in the financial industry as a writer, analyst, marketer, and content strategist. She enjoys writing about emerging trends… Read more

Buying wine overseas, whether as an investment or simply for the pleasure of collecting and sampling good wine, has long been an attractive international purchase, particularly for wine enthusiasts. Buying good wine at a fair price or securing a decent return on oenological investment, however, requires significant research and preparation.


Many investors consider wine a quality alternative asset for investment for a number of reasons, including the facts that each wine has a finite supply and that it is relatively easy to trade after an initial purchase. Additionally, since wine is considered a perishable item, it is not subject to capital gains taxes, as long as an individual is not trading it regularly.

Keeping these points in mind, whether looking at wine as an investment or simply purchasing foreign wines during an overseas trip, there are a few key things to bear in mind when considering an international wine purchase.


Focus your efforts


Wine experts, such as Mary Ewing-Mulligan, president of the International Wine Center and coauthor of Wine Style: Using Your Senses to Explore and Enjoy Wine, say that wines from trendy terrains tend to be more expensive. It can therefore make more sense to focus on regions of the world that aren’t as well known or don’t have the level of name recognition as chateaux in Bordeaux or the Napa Valley. Check out wine growing regions that aren’t necessarily famous worldwide. It is in these locations that wine lovers and investors often find the best value. Outside of the US, Ewing-Mulligan suggests looking into areas like the south of France and also southern Italy.

Patrick Fegan, director of the Chicago Wine School, also suggests buying from locations where land costs are lower, as a winery’s bottle prices may be reflective of the overall real estate value of the land on which the wine is produced. Wine connoisseurs will find wines of equal quality for half the price is they opt to look outside of Napa in nearby Paso Robles, where real estate prices are much lower, but the climate and terrain are largely similar.

Many experts also suggest choosing wines that come from warmer climates. Karen MacNeil, author of The Wine Bible and a director of the wine program at the Culinary Institute of America, recommends this tactic. In general, she advises, wines produced from grapes grown in warmer climates, including Spain, Australia, and California, will produce higher quality inexpensive wines compared to those grown in colder regions. She points to Burgundy, France, as an example of a colder region, where it is necessary to spend more in order to obtain a good bottle of wine, since the cooler climate can make grape cultivation less predictable and dependable.

New or up-and-coming regions that are still proving that they can compete with the more-established wine-producing regions can also offer good deals. Regions that don’t have a long history of winemaking, such as South America, offer great deals on good wine; Argentinian malbec wines are a currently a good value.

Another good way to learn about a region’s wine is to attend wine and food festivals. These offer a cost-effective way to sample a large variety of wines for a fixed price, and provide the chance to ask questions of representatives from local wineries.


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Consider when you buy


Most wine experts agree that the timing of a wine purchase can make a big difference in determining the amount you will pay. This is an important consideration when timing an overseas money transfer for purchasing wine. Generally speaking, most wine is cheapest when it’s first released. Often referred to as the “first tranche” or the first slice. A wine’s value will then increase the more it becomes in demand. Wine producers sell to distributors, who modify the price based on the number of orders coming in from the retail sector. This means that by the time the wine is sitting on a shelf in a store, its price has likely already been increased three times (referred to as the three-tier system). By purchasing wine in the first tranche, it is possible to avoid these price increases.

In order to lock in a first tranche price you may purchase wine futures or en primeur. Although this practice tends to be used only by experienced wine buyers, it can be a great way to lock in a lower upfront price, especially if you know the wine’s price will go up once it’s on the market. However, the risk to this type of purchase is the possibility of being stuck with a large amount of sub par wine if it turns out the vintage doesn’t pan out. If you do choose to purchase wine futures, make sure you use a well-established wine merchant with a solid track record. Since the industry is unregulated, using a reputable wine merchant is crucial. Wine merchants do not typically charge a direct fee for their services, but instead take a 10-15% margin on what they sell.

Lastly, many wineries offer fall discounts on the previous years’ wines. If you’re waiting for an optimal time to stock up on wines, waiting until the fall, when most wineries are moving in new inventory and need to make room on their shelves, it is often possible to find good deals on the previous years’ wines.


Additional money-saving tips


A few other things that can potentially help you save when sending money overseas to purchase wine include buying second labels–a second label is a second line of wines used with grapes that weren’t used in the winery’s primary label–, buying in bulk, and of course, scouring the Internet to find good deals. There are a variety of online sites dedicated to helping people find great deals on wine.

Smart wine buying requires a bit of research to find good deals. Using some of these methods and tips, in addition to working with a specialist currency broker to send money internationally, can help ensure that you find wine that suits your taste and falls within your budget.
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