Cellar builder plan: it pays with age
Wine is a sophisticated and demanding beverage. It is rewarding to drink, but becomes an expensive mistake if improperly stored or opened at the wrong time. It certainly pays to be patient with wines that have the structure and body to age gracefully – but you must know which wines they are!
We at Hermitage would like to offer our expertise in wine selection and our knowledge of ageing potential. Hence we have created the Cellar Builder Plan – a professionally handled, highly versatile wine management service unique in the business.
Hermitage’s Cellar Builder Plan will help you build a customized wine collection with the least hassle. A cellar may be entirely planned for personal consumption, solely for investment, or a combination of both. We will assign you a relationship manager to assist you with wine selection; we will provide you with various storage solutions; we will sell or relocate your wines for you; we will keep track of your wines and find selling or buying opportunities for you. We do it all for you!
Wine management with the cellar builder plan
Our Cellar Builder Plan offers a broad range of wine services for the convenience of our clients.
Do you need help with storage? Do you need advice for managing a cellar for personal drinking? Do you want to invest in wines? Or buy wine futures to ensure a future supply? You can do it all with the Cellar Builder Plan!
Rising global demand for fine wines
Demand for fine wines is growing rapidly. Globalization and international travel have boosted interest in wines among formerly non-wine drinking areas. Wine reviews are now easily available online, along with information about vineyards and wine growing regions.
France and the European Union have strict restrictions on the top vineyards to ensure their production remains very limited. Yet interest in wine is increasing worldwide, especially in Asia which is becoming a huge wine market. Datamonitor has calculated that the Singapore wine market grows by 7.9% p.a. This creates an unparalleled investment opportunity!
Wine investing has existed for hundreds of years. Records made over the past 300 years demonstrate that fine wine is one of the most stable, high-yielding, low-risk investments in the world. Wine prices are unaffected by general elections, stock market fluctuations, inflation or changes in interest rates.
With strong connections to top vineyards worldwide and years of experience in wine investment, Hermitage Wines is well poised to offer investment opportunities in fine wines through Our Cellar Builder Plan!
Wine futures: en primeur wines
Wine merchants are typically invited to taste wines while they are still in the barrel. Experienced merchants are able to tell how the unfinished wine will taste after it ages, so they can make informed offers for the wine. The wine merchant then offers the wines to clients in the form of a promise to deliver later at an agreed price. This is a wine future, also called ‘en primeur’.
Buying en primeur has several advantages. Because the client is essentially buying direct from the grower, he is assured of the provenance of the wine. He can also be certain of the conditions under which his wine is stored.
Demand for some wines exceeds their supply, so all of a grower’s wine may be sold before it is even bottled. It can be difficult or expensive to buy that wine later. Buying en primeur ensures the client will get his supply, and possibly even resell at a profit. The client can also specify the bottle size when buying en primeur.
Whether you want to drink, collect or invest, it makes sense to invest in wine futures. And our Cellar Builder Plan makes it easy for you to do so.
Why subscribe to our cellar builder plan?
A Cellar Builder plan offers much flexibility. You can collect, consume or invest, changing your mind anytime along the way. The possibilities are unlimited!
Wine investors and collectors often fret over the problem of storage. Under our Cellar Builder Plan, your wine will be professionally stored. You can buy en primeur wine through our Plan. This helps you lock in a lower price than what you would pay for the matured product. You would be assured of both the supply and the provenance of the wine. Furthermore,
you can specify the bottle size.
Investors in wine funds and futures have no say over the wines being invested in; nor do they have the right to remove a case for a drinking party and sell the rest. Some wine funds are even limited by time – all wines are sold after a certain number of years. In contrast, our Cellar Builder Plan offers you control over your wine cellar – whether for investing or drinking.
Our Cellar Builder Plan also offers many advantages over other investments such as unit trusts, life assurance,
investment bonds or equities. We enjoy the following attributes:
• Tax Free while held In-Bond
• Easily Transacted
• Limited Availability
• Increasing Rarity due to Consumption
• Increasing Demand worldwide
• World-Wide Saleability
• An opportunity to Diversify one’s assets
• Not Correlated with other asset markets (e.g Stock or Bond Market).
Note: If you tell your relationship manager that you wish to create a cellar solely for investment purposes, Hermitage’s experienced wine brokers will only recommend wines that have a proven record in the secondary market.
Three ways to manage your cellar builder plan
You have full control of everything that is bought or sold. You contact us when you want to make a purchase. We occasionally receive attractive spot offers for wine. If an excellent buying or selling opportunity arises, we will contact you to make a quick purchasing decision. Hermitage staff will not manage your portfolio actively.
B Purchasing under partial discretion by Hermitage
You can pre-dictate your preferred selection of wines or simply allow us to make wine selections for your cellar by stating your instructions in your application form. You will always be consulted before any purchase is finalized. Under this option, Hermitage relationship managers will make selections quarterly each year based on your wine preferences and the amount of your contribution. We will also take into consideration what wines you already have, adjusting selections such that your cellar is well-balanced with options for short- and long-term drinking.
C Purchasing under full discretion by Hermitage
You will be NOT be consulted on purchase or sale decisions by Hermitage staff. Any transaction will be reflected in the quarterly statement. If you state a desired profit margin in your application, when the value of your wine rises to a level that will cover both your margin and our brokerage fees of 10%, your relationship manager will automatically look for a buyer for your wine.
B Simulated cellars under the cellar builder plan
Here are two examples of cellars managed under Hermitage Wines’ Cellar Builder Plan. The tables are based on an estimated annual increase in portfolio value of 20%. This figure is realistic, given the historical returns for highly rated fine wines (over 96 points) by Parker.
Your cellar would probably look different, since it will be tailored according to the preferences indicated on your application form!