I recently saw a post by the investor Michael Burry detailing his strategy for buying and consuming wine, “for free”. I will try to simplify it here:
Buy great wine at good prices
Purchase said wine in Europe, and use bonded storage to keep the wine outside the U.S.
Ship a portion of the wine to yourself when you want to drink it
When the dollar goes down, or when tariffs decrease, you have done well, and can sell the remaining wine profitably.
I have to admit that this article was quite thought-provoking, and sent me back down a rabbit hole I have explored several times already - can one drink “for free” by buying and selling wine in a clever fashion? There are books by Andrawes and Sokolin on this topic, and I’ve heard of people doing this (though I’ve never figured out their exact protocols). The Burry innovation is to add the short-dollar angle to the whole project.
But it seems like a massive hassle! You’d have to a) identify European retailers, b) hunt for bargains successfully, c) buy in large enough quantities for the economics to matter, d) manage the chain of custody remotely, e) find great bonded storage, f) source insurance, g) ensure you can actually get your bottles out when you want them, h) manage shipping to the U.S., i) make sure your wine can actually be sold in Europe or elsewhere, and j) make sure the juice doesn’t get cooked, stolen, or frozen along the way.
Have I missed anything? At some point, my time is worth more than the savings.
None of that is all that difficult. I’ve been doing it for years. But, no, it doesn’t mean you can drink for free. This is like the “5 hour work week” guy. Turns out he was actually working a lot more than the 5 hours he claimed when he had to put out all the fires that started due to his 5 hour weeks.
Curious to know why you do all this - are you sourcing wines that aren’t available in the U.S., saving money, something else? If it’s not difficult it might actually be a borderline fun challenge!
Prices are usually substantially better in the EU and UK than in the U.S. and yes, you can source some things there you can’t easily find stateside, particularly for Burgundy.
If you buy a lot of Burgundy at the top end of the desirability/price spectrum like Andrew does, it makes sense to avoid the cumbersome and expensive U.S. three-tier pricing structure.
I piggy back some EU purchased-wine with a friend who buys wine this way and deals with the work of storing/shipping from abroad. The recent unpleasantness with tariffs means we are leaving a pile of bottles stored cheaply in bond in the U.K. until the devoutly-hoped-for date that tariff costs revert back to less punitive levels.
U.S. retailers who offer pre-arrival deals leverage this same price differential for those of us who don’t buy pallets of wine and who don’t want to bother with the hassle of shipping in from across the pond (aka: me).
Increased U.S. tariffs on wines brought in from the EU/UK blunt the advantages of buying direct and I think, have seriously impacted the volume of pre-arrival sales. I used to do it a lot and with confidence, now I rarely do it. The collapse of VINT Marketplace and Cru and Domaine, cost/lost me $2200 and $3000 respectively. Uptown problems for sure, but also a valuable lesson.
This strategy worked well for years in the US. Buying wines in reasonable quantities, first Bordeaux then Burgundy, Letting wines mature, selling at auction, and keeping enough wine to drink for free or a lot cheaper was my MO for years. I haven’t bought wine in years (too old and too much wine) so I have no idea if this strategy is still viable here in the US but I would guess not.
I remember when I was young that people recommended buying two cases of first growth Bordeauxs on futures. Hold for a time. Drink one case and sell the other. I doubt that works anymore as future prices have not been the bargains they used to be in a long time.\.
If you can get allocations of Burgundy from top producers (very hard these days), this can work. The prices at some producers are much cheaper at the producers than they are at retail, whether in the US or Europe. Sometimes on can find good buys in some places in retail Burgundy (like at the Caveau de Chassagne Montrachet), but it seems for the top producers this has gotten harder and harder over the last decade or more.
If you are not buying pallets of wines, ship using Cote d’Or Imports. Since you avoid paying VAT that way, you often end up shipping for free or less on a net basis. Cote d’Or Imports - Sending your wine treasures home Even when we are in Burgundy buying wines at wineries, etc., we have the wines shipped to us via Cote d’Or Imports.
Very difficult to do these days. Wine as an investment class has not performed well over the past few years. If you want to invest in Bordeaux, I’d look at Petrus, and Le Pin. Else, I’d consider wines scored 100 Pts by Robert Parker, or others, especially pre 2000, and only purchase full, cases in the wood. Select vintages of First Growths, Cheval Blanc, Pichon Comtesse and a few others might increase in value.
For Burgundy, the only wines I’d invest in are at the top end, DRC, Coche, Leroy etc. For deals you would need a cellar door allocation, which are almost impossible to come by, unless you’ve been buying for years, or have good friends that happily share.
Generally, there are better deals in the states because a lot of wine was purchased with a strong dollar.
All that being said, with the cost of money, storage, taxes and cost of sales, put your money into an ETF and buy wine with the profit.
The best advice is to make sure you invest in wines you want to drink, because if your investment does not pay off, you still have wine you like to drink.