Wine and Politics

I am planning to consign the better part of my collection to a major firm. If serious political discord continues through this year would people see this as having any effect on prices realized?

Thanks.

the general consensus is that there’s tons of money in the financial system needing a place to find a home. appreciable assets including stocks are at all time highs. i cant see how this can not help support wine prices in 2021 barring an exogenous event.

I am skeptical that the political situation will affect wine prices. It hasn’t affected the equity market, and there is too much money chasing after too little wine. Especially with the usual clientele working from home not spending on travel etc. like in the before times, buying wine is one of the few outlets for that kind of money.

I would consider tariffs (ending/extension/expansion of) a political variable worth considering.

What Adrian said: people staying home buying wine at auction should help lift wine prices.

For now as far as I see the risk of economic pain continues to be for those outside of the community of buyers of high-end wine (the type you would consign).

When/if wine prices go down other traditional liquid investments likely to be going down too. Not sure when that will happen, though. Currency reset?

Thanks to the experts for your advice. I think my conclusion is sell, but do it fast.

No. I have been following the wine market for now 25 years and absolutely nothing has had a serious impact on pricing. Yes there have been opportunities to pick up deals in the early parts of the financial crisis or recently to get allocations that restaurants have not taken. Overall the market for the wines I like go up and up and have consistently.

“Republicans buy Pinot too” -Michael Jordan

All economic indicators point to ongoing price support for the “high end” of wine.

I can’t imagine any series of world events that would slow the roll.

Heck, they can’t forge enough Petrus/DRC to keep up with demand, let alone dent the price of actual Petrus/DRC.

How so? I don’t understand…

Based on the high prices for the Phelps cellar I would not worry about it.

There may be tax advantages for donating a few bottles that have greatly appreciated in value. I am sure there are charitable organizations, colleges, etc. that would be interested.

Disclaimer: I am not a tax attorney, and this is not tax advice.

In my experience talking with auction sites, the market is very good for sellers and I don’t see that changing. I would say that people buying wine at auction do not feel the waves of political change as much.

Trump wines will be on sale.

I actually would have thought the opposite. To me, it seems likely that prices would potentially rise over the course of 2021. Economic fears and uncertainty related to the pandemic should ease with the continued rollout of the vaccination. In addition, employment should increase as restaurants and travel industry reopen to a public hungry for travel and fun. An actual political turmoil (meaning the risk of violence) is likely to be at its peak over the next month or so (until Biden is sworn in and his cabinet largely confirmed), but should then die down (even if political division remains exceedingly high). Even if the political turmoil remains, it can’t be any worse than it is right now. I would have thought that late spring or early fall would be ideal (assuming Summer is a no-go due to shipping temperatures).

The thing about restaurants reopening is whether they can go back to the old business model, which depended in part on excruciating markups on wine and liquor. The very best high end places will probably be able to do that. But in the middle and lower tiers , I suspect people are getting acclimatised to restaurant delivery or takeout. Wines that are available with that seem to have much lower markups. Or people are just using their own cellars or other sources.
I think the demand for 3+ x retail wine will be greatly diminished.

High end old fashioned ‘fine dining’ restaurants had been disappearing before Covid. I wonder if they will ever return as we knew them — like 3,000 seat opera houses.

Good thing you disclaimed…you cannot claim the appreciated value of the donated good unless it is used for its intended purpose by the charity. You get to claim what you paid for it.

Donate your SQN. I do.

fred

What Fred said with a caveat, if the wine is used in the charitable purpose of the donee, then you can may be able to take FMV - for example, a school for a wine tasting class, etc.

If the charity is going to flip it or place it in an auction, then your deduction is cost basis. I also donate SQN - and the charity usually gets a great $ on the auction.