How to Invest in Wine Stocks: Physical or Drinks Equities?
Updated
Anyone working out how to invest in wine stocks has two routes. You can either acquire physical fine wine as an alternative asset, or purchase shares in an investment wine fund or publicly traded companies within the drinks industry. Investing directly in specific cases of wine often involves working with a broker or merchant to manage the acquisition and storage, while investment wine funds pool capital from multiple investors. Both approaches come with distinct considerations, including market liquidity, storage costs, and tax implications, which differ significantly from traditional stock market investments. Understanding the performance of fine wine market indices and the specific characteristics of wine as a tangible asset is crucial for informed decision-making.
What does "invest in wine stocks" mean for you?
When considering how to invest in wine stocks, it is important to distinguish between two primary avenues: investing in physical fine wine itself and investing in shares of companies involved in the wine or broader drinks industry. Investment wine is viewed by some as an alternative investment, similar to gold bullion or fine art, purchased with the intention to resell at a higher price in the future. For those directly buying specific cases of wine inexperienced investors work with a broker, merchant, or consultant to minimize risk. Another option, is purchasing shares in an investment wine fund that pools investors' capital. You can compare the performance of physical wine indices against listed drinks equities to inform your strategy.
How do fine wine market indices perform?
Fine wine market performance can be tracked through various indices provided by The London International Vintners Exchange (Liv-ex), which has been monitoring prices since 2000 using independent, transaction-based data known as the Liv-ex Mid Price (Liv-ex). These indices offer a broad measure of the market, with different benchmarks tracking specific segments.
For example, according to Liv-ex, the Liv-ex Fine Wine 50 Index tracks the daily price movements of Bordeaux First Growths, specifically the ten most recent vintages of Lafite Rothschild, Margaux, Mouton Rothschild, Haut-Brion, and Latour. Liv-ex describes the Liv-ex Fine Wine 100 Index as the industry-leading benchmark, representing the price movement of 100 of the most sought-after fine wines on the secondary market. The Liv-ex Fine Wine 1000 is Liv-ex's broadest measure, tracking 1,000 wines from around the world and comprising seven sub-indices, including the Bordeaux 500, Burgundy 150, and Champagne 50 (Liv-ex).
Here is a comparison of the 1-year and 5-year performance of some major Liv-ex indices:
| Index | 1-Year Performance | 5-Year Performance |
|---|---|---|
| Liv-ex Fine Wine 50 | 1.6% | -22.4% |
| Liv-ex Fine Wine 100 | 3.3% | -7.4% |
| Liv-ex Fine Wine 1000 | 1.2% | -7.9% |
| Liv-ex Bordeaux 500 | -0.4% | -18.3% |
| Liv-ex Burgundy 150 | 1.9% | 3.1% |
| Liv-ex Champagne 50 | 2.6% | 8.7% |
| Liv-ex Italy 100 | 2.9% | 4.6% |
These figures, sourced from Liv-ex, illustrate the varied performance across different fine wine categories over recent periods. For more on the broader context of fine wine as an asset, see our guide on fine wine investment.
What are the tax implications of holding wine?
In the UK, you may have to pay Capital Gains Tax (CGT) if you make a profit when you sell a personal possession for £6,000 or more, according to GOV.UK. However, you do not usually pay CGT on anything with a limited lifespan, such as clocks, unless used for business (GOV.UK). HMRC's Capital Gains Manual CG76900 clarifies that disposals of chattels (tangible moveable property) which are wasting assets are exempt for CGT purposes unless Capital Allowances were or could have been claimed, or TCGA92/S45(3B) applies (HMRC Capital Gains Manual). Wasting assets are defined as those with a predictable life not exceeding 50 years (HMRC Capital Gains Manual). Fine wine, generally considered to have a finite lifespan, often falls into this category.
Beyond capital gains, if you decide to consume your wine, alcohol duty rates apply. HMRC sets these rates per litre of pure alcohol (HMRC Alcohol Duty rates). For wine, the rates vary based on alcohol by volume (ABV):
| Alcohol by Volume (ABV) | Amount of duty in £ (pounds) for each litre of pure alcohol in the product |
|---|---|
| 0 to 1.2% | 0.00 |
| 1.3% to 3.4% | 9.96 |
| 3.5% to 8.4% | 26.61 |
| 8.5% to 22% | 30.62 |
| Stronger than 22% | 33.99 |
These rates, updated as of 1 February 2026, are important to consider if you plan to move wine from bonded storage for personal consumption (HMRC Alcohol Duty rates). Calculating the all-in cost of your wine can be complex, so our landed cost calculator can help.
What are the drawbacks of investing in physical wine?
Investing in physical wine presents several drawbacks that differ from traditional financial instruments. Stored wine produces no return for the investor until it is sold, unlike dividend-paying stocks and bonds. We also state that insurance and storage costs mean the investor is losing money while waiting for the wine's value to appreciate. Proper wine storage is critical to preserving value.
Liquidity can also be a significant concern. In the US, most states only allow private wine sales through auctions, which may take a commission of 15% to 25%. This can impact your net proceeds when you decide to sell fine wine. The market for investment-grade wine is also highly concentrated: Perhaps only 250 producers globally create wines worth considering as a financial investment, with about 90 percent of the world's investment-grade wine produced in the Bordeaux region of France. This concentration can make the market susceptible to specific regional or vintage fluctuations.
The sector has attracted fraudsters in both the UK and US, who prey on victims' ignorance of the wine market. Wine fraud often involves charging excessively high prices for off-vintage or lower-status wines from famous regions, claiming they are sound investments unaffected by economic cycles. When considering how to buy wine at auction, due diligence is essential.
Do non-experts enjoy expensive wines more in blind tastings?
A study published in the Journal of Wine Economics in 2008, based on a large sample of more than 6,000 US blind tastings, investigated the relationship between price and subjective appreciation of wines when the price was unknown to the taster (Goldstein et al., 2008). According to Goldstein et al. (2008), the study included 506 participants who tasted wine flights composed from 523 different wines, with prices ranging from $1.65 to $150 per bottle.
The main finding was that "individuals who are unaware of the price do not, on average, derive more enjoyment from more expensive wine" (Goldstein et al., 2008). In fact, for non-experts, the correlation between price and overall rating was found to be small and negative, suggesting they "enjoy more expensive wines slightly less" (Goldstein et al., 2008). The study's OLS estimation of Model 1 showed a coefficient of about -0.04 for price, implying that a 100% increase in the natural logarithm of price was associated with a 0.04 reduction in the overall rating on a scale of 1 ("Bad") to 4 ("Great") (Goldstein et al., 2008).
However, Goldstein et al. (2008) report that for individuals with wine training, who made up about 12% of participants, the relationship between price and enjoyment was different. The study found "indications of a non-negative relationship between price and enjoyment" for these experts (Goldstein et al., 2008). For experts, the net coefficient on price was about 0.09 for OLS, which was significantly different from zero at the 10% level (Goldstein et al., 2008).
The Journal of Wine Economics study predicted that if a wine cost ten times more than another, non-experts would assign an overall rating four points lower on a 100-point scale, while experts would assign a rating seven points higher (Goldstein et al., 2008). The point where experts and non-experts were expected to assign the same rating was at a price of $25.70, where both groups would assign a rating of about 2.2 (Goldstein et al., 2008). Below this price, experts were predicted to assign lower ratings than non-experts, and vice versa (Goldstein et al., 2008). These findings suggest that "non-expert wine consumers should not anticipate greater enjoyment of the intrinsic qualities of a wine simply because it is expensive or is appreci- ated by" (Goldstein et al., 2008). This distinction between intrinsic enjoyment and market value is a key consideration for collectors deciding whether to drink now or hold their wines.
Understand the current market dynamics and compare the performance of various fine wine regions and styles with our live market index.