The Wine Collector

Wine collectors often wonder whether, and how much, factors such as label condition, fill levels, cork condition, capsule condition, and color, impact the value of a bottle of wine.

The first level of triage one needs to perform is whether the contents of the bottle are likely to have been negatively impacted by whatever the "condition" is.  If there's a distinct prospect of the wine being bad, then the bottle is worthless in my view as buying it boils down to a pure gamble. 

Even when conditions have no impact on the wine itself (e.g., torn labels), value can easily be negatively affected.  A good test to apply is to ask yourself whether an average group of consumers for the particular wine in question would be less likely to buy that bottle because of its condition.  The higher the percentage that would decline, the larger the discount will be.  Precise value adjustments for different conditions are difficult to determine as this would require a multi-variable regression analysis of what are often very subjective assessments. 

A practical approach to evaluating varying bottle conditions

Vinfolio operates on the premise that buyer satisfaction is paramount so we inspect every bottle we purchase according to a published set of Inspection Guidelines.  These guidelines effectively determine what we define as commercially acceptable criteria for selling wine at a uniform price point.  Any bottle which does not meet our condition criteria is rejected (i.e. not purchased).  In the event a customer is not satisfied with a bottle's condition, we'll simply take the wine back (which is very rare).

Reminder on preserving the value of your wine

By far the most important step you can take to preserve the value of your wine is proper, climate-controlled wine storage (which many of our criteria are intended to measure).  You should still do your best to avoid creating cosmetic damage to labels and capsules when handling your wine, even if you plan on drinking all of it, to keep your options open for selling it later at maximum value.

Note: This post was stimulated by an item on the eRobertparker.com Squires board titled "Effect on value for label damage?".

P.S.    The photo shown is an example of a bottle of Peter Michael chardonnay that we declined to purchase because of its torn label.

The Wine Spectator's Peter Meltzer addresses this topic quite well in a recent post in his Collecting Q&A online column (read it before continuing -- it's brief).

While auction houses tell you that you're buying "as is" and one could argue that the detailed disclosure of every fill level, label tear and other bottle condition is meant for you to factor this information (and any risk it may imply) into your bid amount, Peter's right that auction houses are empowered to make exceptions to preserve buyer relationships.  A lesser known fact is that their contractual agreement with the seller enables them to pass any liability incurred from accepting such a return back to the seller.

Every major auction house sales contract that I've seen has a "rescission of sale" clause.  This enables the auction house, usually in its "sole judgment", to accept a customer return for a variety of issues (including quality) and rescind the sale (meaning the seller doesn't get paid or reimburses the auction house if he's already been paid).  Whether the auction house actually bothers an important seller client for what may be a small adjustment is another matter but they have the recourse to do so.

On a related topic, you might enjoy reading an earlier post from 2006 called "Returning faulty wine to retailers."

P.S.    The photo is of a 1976 La Tache that you would not want to have received.... 

In the past week, two reporters have approached me wanting to discuss the topic of investing in wine.  No doubt the dramatic price rises for Bordeaux wine, in particular, is fueling their interest (read "New money's taste for fine wine cleanses wallets as well as palates" from yesterday's Financial Times for some impressive data on pricing trends).

When forced to admit whether I'm aware of specific Vinfolio customers who are pursuing wine investment as the primary motivation for their purchases, I can't come up with one name (excluding members of the trade who buy from us to resell).  Nor am I aware of U.S. retailers promoting investment as a rationale for making sales to customers. (Please post a comment with a link to a marketing page from a U.S. retailer web site if you know of any).

The UK is a different story.  In my European Trip Observations post from May 2007, I noted that some UK tax incentives and long-standing retailer promotion of wine investment have made wine investing a more common activity there.  For example, the reputable UK retailer Berry Brothers & Rudd promotes wine investment via their Cellar Plan offering and I understand they have thousands of participants.  The Financial Times even publishes an annual wine investment report (for a summary, see this post from a relatively new site called WineInvestor.com). 

I think that it's far more common for the typical wine collector to engage in a form of wine investing, which is buying some extra wine to finance their drinking habit or buying excess wine to have an option of drinking it later if it matures nicely (see Pleasure before profit - thoughts on investing in wine).  If you nevertheless want to dive into the investing game in a bigger way, read my Wine investing tips.

The folks over at Good Grape: A Wine Manifesto did a poll of wine consumers where a single question was asked: "What's the most important issue facing the wine industry?"

Answer: Wine shipping (with 56% of all replies).

Had I taken the poll, that would have been my answer too (my profile in the upper left corner of my blog lists Interstate shipping laws as my least favorite aspect of the wine industry).

We're trying to do something about it by being an active supporter of the Specialty Wine Retailers Association and you can do something too.  Join the SWRA's Consumer Outreach Email List.  Also see my prior post on this topic: Winning the wine direct shipping war.

Does anyone really believe that Two-Buck Chuck Chardonnay is California's best chardonnay other than the judges at the California State Fair Commercial Wine Competition this past week? 

I've got nothing against the brand but "best" means numero uno, meaning better than true stars like Aubert, Kistler, Kongsgaard, Marcassin, and Peter Michael.  Who's kidding who?

Alder Yarrow's call to "Stop the State Fair Madness" in his post over at Vinography says it all.  You might also be interested in James Laube's (of the Wine Spectator) review of the wine ("No passing the Buck: Here's my take"). 

If you're curious how the competition is structured, you can read the details on the offical site.