The wine market and "Wine Banking"

Click on the picture below to discover the video

The wine market and "Wine Banking" - Expert Views

Our expert Matthieu Gombault, Head of Wine Banking Services, tells us about the dynamism of the wine market, its trends and presents our dedicated expertise, which encompasses a whole range of services provided by our partners in the world of wine.

Full script

THE WINE MARKET AND "WINE BANKING" - EXPERT VIEWS

Wine Banking is a Societe Generale Private Banking expertise. It includes a range of services provided by our expert partners in the world of wine, designed to assist you in the realisation of your projects, whether they are related to land (vineyards) or bottles. Expert views with our expert Matthieu Gombault, Head of Wine Banking Services.

An overview of the current wine market

The wine universe is an ever-changing one. Today, the search for vintage wines has never been as intense, and emerging countries such as China, Russia and – more recently – India are seeing new consumers emerge. Over the last few years, demand has therefore significantly increased whilst the volumes produced have remained stable, creating a disparity between offer and demand.

The wine market consists of two very distinct parts:

- The vintage and prestigious wine market, associated with the luxury sector,

- And the rest of the market comprising all other wines, associated with traditional consumption.

The vintage and prestigious wine universe has seen a very positive trend over the last couple of decades, with wine estates seeing their price per hectare surge and vintage wines seeing their prices continually increase*.

How to invest in wine?

Are you a wine enthusiast who would like to purchase or sell a wine estate? Are you seeking to build up a wine cellar or sell one? Are you looking for rare bottles of wine? There are a number of ways of investing if you are interested in the wine universe.
Winegrowing assets, whether relating to real estate, i.e. the vines, or to production, i.e. bottles of wine, can fulfil an asset diversification objective, but can also represent an impulse purchase.

Within the framework of an asset diversification objective, vineyards come into play. You could become the owner or joint owner of a wine estate via appropriate financial vehicles such as a Société de Placement Immobilier (real estate investment trust) or by acquiring a stake in an estate’s capital. The cost of a wine estate depends on the latter’s size, the region in which it is located and the quality of its vines. This cost generally ranges from 500,000 euros to millions of euros, and can even reach tens of millions of euros for the top estates. But beware; a wine grower’s job is a highly demanding one, with this activity facing numerous potential hurdles such as poor weather and disease. Furthermore, selling and distributing wine requires good knowledge of this sector.
Within the framework of an impulse purchase, i.e. buying wine for pleasure, you can opt instead to invest in bottles by seeking to build up a cellar of vintage wines that are liable to increase in value over time. If you decide to invest in quality bottles of wine, there are a number of options: consumption, resale or transfer. In all three cases, the aim is not a short-term return but the accumulation of assets.

Whether you opt for asset diversification or an impulse purchase, whatever your objective, it is very important to think carefully and discuss the nature of your project before initiating it.

Societe Generale Private Banking’s "Wine Banking" offer

Whether you prefer real estate or bottles, we at Societe Generale Private Banking can help you implement your wine projects thanks to our network of partners who are wine-sector experts, both within and outside the Societe Generale group.

Indeed, we can put you in touch with these external experts within the framework of the acquisition or divestment of wine estates. They will also be able to help you build up or sell a wine cellar or search for specific wine bottles.

To find out more about Societe Generale Private Banking’s ‘Wine Banking’ offer, please feel free to contact your Private Banker. If you wish, we would be happy to initiate a discussion with you regarding our solutions and to put you in contact with our network of partners.

* Sources: SAFER, 2020 studies

An overview of the current wine market

The wine universe is an ever-changing one. Today, the search for vintage wines has never been as intense, and emerging countries such as China, Russia and – more recently – India are seeing new consumers emerge. Over the last few years, demand has therefore significantly increased whilst the volumes produced have remained stable, creating a disparity between offer and demand.

The wine market consists of two very distinct parts:

- The vintage and prestigious wine market, associated with the luxury sector,

- And the rest of the market comprising all other wines, associated with traditional consumption.

The vintage and prestigious wine universe has seen a very positive trend over the last couple of decades, with wine estates seeing their price per hectare surge and vintage wines seeing their prices continually increase*.

How to invest in wine?

Are you a wine enthusiast who would like to purchase or sell a wine estate? Are you seeking to build up a wine cellar or sell one? Are you looking for rare bottles of wine? There are a number of ways of investing if you are interested in the wine universe.
Winegrowing assets, whether relating to real estate, i.e. the vines, or to production, i.e. bottles of wine, can fulfil an asset diversification objective, but can also represent an impulse purchase.

Within the framework of an asset diversification objective, vineyards come into play. You could become the owner or joint owner of a wine estate via appropriate financial vehicles such as a Société de Placement Immobilier (real estate investment trust) or by acquiring a stake in an estate’s capital. The cost of a wine estate depends on the latter’s size, the region in which it is located and the quality of its vines. This cost generally ranges from 500,000 euros to millions of euros, and can even reach tens of millions of euros for the top estates. But beware; a wine grower’s job is a highly demanding one, with this activity facing numerous potential hurdles such as poor weather and disease. Furthermore, selling and distributing wine requires good knowledge of this sector.
Within the framework of an impulse purchase, i.e. buying wine for pleasure, you can opt instead to invest in bottles by seeking to build up a cellar of vintage wines that are liable to increase in value over time. If you decide to invest in quality bottles of wine, there are a number of options: consumption, resale or transfer. In all three cases, the aim is not a short-term return but the accumulation of assets.

Whether you opt for asset diversification or an impulse purchase, whatever your objective, it is very important to think carefully and discuss the nature of your project before initiating it.

Societe Generale Private Banking’s "Wine Banking" offer

Whether you prefer real estate or bottles, we at Societe Generale Private Banking can help you implement your wine projects thanks to our network of partners who are wine-sector experts, both within and outside the Societe Generale group.

Indeed, we can put you in touch with these external experts within the framework of the acquisition or divestment of wine estates. They will also be able to help you build up or sell a wine cellar or search for specific wine bottles.

To find out more about Societe Generale Private Banking’s ‘Wine Banking’ offer, please feel free to contact your Private Banker. If you wish, we would be happy to initiate a discussion with you regarding our solutions and to put you in contact with our network of partners.

* Sources: SAFER, 2020 studies

Would you like to discuss this subject further with us?

Contact my private banker

This video/audio content is produced by experts from Société Générale Private Banking. Its content is not intended to provide an investment service, it does not constitute investment advice or a personalised recommendation on a financial product, nor does it constitute insurance advice or a personalised recommendation, nor does it constitute a solicitation of any kind, nor does it constitute legal, accounting or tax advice on the part of any entity under the authority of Société Générale Private Banking.

Understanding it may require the skills necessary to understand the financial markets and to master the financial and economic information it contains. To learn more, please contact your private banker, and read the full disclaimer at the end of the video/audio content."

The information contained in this video/audio content is for informational purposes only, is subject to change without notice, and is intended to provide information that may be useful in making a decision. Past performance information that may be reproduced is no guarantee of future performance.

The price and value of investments and the income derived from them may go down as well as up. Changes in inflation, interest rates and exchange rates may adversely affect the value, price and income of investments denominated in a currency other than that of the investor. Any simulations and examples contained in this publication are provided for illustrative purposes only. This information is subject to change as a result of market fluctuations and the information and opinions contained in this publication may change. No Societe Generale Private Banking entity undertakes to update or amend this publication, which may become obsolete after viewing/listening, and will not assume any liability in this respect.

The offerings related to the wealth and financial activities and information discussed in this video/audio content will depend on each client's personal circumstances, applicable laws and tax residency. It is the responsibility of the potential investor to ensure with their legal and tax advisors that they comply with the legal and regulatory requirements of the relevant jurisdiction. This video/audio content is in no way intended to be broadcast/listened to in the United States, nor to/by a US tax resident, nor to/by a person or in a jurisdiction where such broadcast would be restricted or illegal.

The offers related to the activities and the wealth and financial information presented may not be adapted or authorised within all Société Générale Private Banking entities. In addition, access to some of these offers is subject to conditions of eligibility.

Certain offers related to the activities and financial information mentioned may present various risks, imply a potential loss of the entire amount invested or even an unlimited potential loss, and therefore be reserved only for a certain category of investors, and/or be suitable only for well-informed investors who are eligible for these types of offers.

Before subscribing to any investment service, financial product or insurance product, depending on the case and the applicable legislation, the potential investor will be questioned by his private banker within the Société Générale Private Banking entity of which he is a client on his knowledge, his experience in investment matters, as well as on his financial situation including his capacity to bear losses and his investment objectives, including his risk tolerance, in order to determine with him whether he is eligible to subscribe to the financial product(s) and/or investment service(s) envisaged and whether the product(s) or investment service(s) is/are compatible with his investment profile.

The potential investor should also (i) take note of all the information contained in the detailed documentation of the service or product envisaged (document entitled "key information for the investor", prospectus, regulations, articles of association, document entitled "key information for the investor", term sheet, information notice, contractual terms and conditions, etc.), in particular those relating to the associated risks; and (ii) consult its legal and tax advisors to assess the legal consequences and tax treatment of the product or service envisaged. It is reminded that the subscription to an investment service, a financial product or an insurance product may have tax consequences and Société Générale Private Banking does not provide tax advice. His private banker will also be available to provide further information, to determine with him whether he is eligible for the product or service under consideration, which may be subject to conditions, and whether it meets his needs.

Accordingly, no entity within Société Générale Private Banking can be held responsible for any decision made by an investor based solely on the information contained in this video/audio content.

This video/audio content is confidential, intended exclusively for the person viewing it, and may not be communicated or made known to third parties, nor reproduced in whole or in part, without the prior written consent of the Société Générale Private Banking entity concerned.

Societe Generale Group maintains an effective administrative organization that takes all necessary measures to identify, control and manage conflicts of interest. To this end, Societe Generale Private Banking entities have put in place a conflict of interest management policy to manage and prevent conflicts of interest. For more details, Société Générale Private Banking clients can refer to the Conflict of Interest Policy available on request from their private banker.

Societe Generale Private Banking has also put in place a policy for handling complaints from its clients, which is available on request from their private banker or on the Societe Generale Private Banking website.

SPECIFIC WARNINGS BY JURISDICTION

France: Unless expressly stated otherwise, this document is published and distributed by Societe Generale, a French bank authorised and supervised by the Autorité de Contrôle Prudentiel et de Résolution, located at 4, place de Budapest, CS 92459, 75436 Paris Cedex 09, under the prudential supervision of the European Central Bank ("ECB") and registered with the ORIAS as an insurance intermediary under the number 07 022 493 orias.fr Societe Generale is a French public limited company with a capital of EUR 1 066 714 367,50 as at 1 August 2019, whose registered office is located at 29, boulevard Haussmann, 75009 Paris, and whose unique identification number is 552 120 222 R.C.S. Paris. Further details are available on request or at www.privatebanking.societegenerale.com.

Luxembourg: This document is distributed in Luxembourg by Société Générale Luxembourg, a public limited company (société anonyme) registered with the Luxembourg Trade and Companies Register under number B 6061 and a credit institution authorised and regulated by the Luxembourg Financial Sector Supervisory Commission ("CSSF"), under the prudential supervision of the European Central Bank ("ECB"), whose registered office is located at 11, avenue Emile Reuter - L 2420 Luxembourg Further details are available on request or at www.societegenerale.lu. No investment decision of any kind should be made on the basis of this document alone. Société Générale Luxembourg accepts no responsibility for the accuracy or otherwise of the information contained in this document. Societe Generale Luxembourg accepts no responsibility for any actions taken by the recipient of this document solely on the basis of this document, and Societe Generale Luxembourg does not represent itself as providing any advice, in particular with respect to investment services. The opinions, views and forecasts expressed in this document (including its annexes) reflect the personal opinions of the author(s) and do not reflect the opinions of any other person or of Société Générale Luxembourg, unless otherwise indicated. This document has been prepared by Societe Generale. The CSSF has not carried out any analysis, verification or control on the content of this document.

Monaco: This document is distributed in Monaco by Société Générale Private Banking (Monaco) S.A.M., located at 11 avenue de Grande Bretagne, 98000 Monaco, Principality of Monaco, regulated by the Autorité de Contrôle Prudentiel et de Résolution and the Commission de Contrôle des Activités Financières. Financial products marketed in Monaco may be reserved for qualified investors in accordance with the provisions of Law n° 1.339 of 07/09/2007 and Sovereign Order n° 1. 285 of 10/09/2007. Further details are available on request or at www.privatebanking.societegenerale.com.

Switzerland: This document is distributed in Switzerland by SOCIETE GENERALE Private Banking (Suisse) SA ("SGPBS"), whose registered office is at rue du Rhône 8, CH-1204 Geneva. SGPBS is a bank authorised by the Swiss Financial Market Supervisory Authority ("FINMA"). Collective investments and structured products may only be offered in accordance with the Swiss Federal Act on Collective Investment Schemes (Collective Investment Schemes Act, CISA) of 23 June 2006 and the Guidelines of the Swiss Bankers Association (SBA) on Information for Investors in Structured Products. Further details are available on request from SGPBS or at www.privatebanking.societegenerale.com.

Alcohol abuse is dangerous for your health, consume in moderation.