Vern Warren – wine investor
Vern helped me gain a liquor license back in the early nineties. I had a large mailing list of people who had attended my wine classes and offered them a service called Bob’s Trade & Exchange. If someone wished to sell a few bottles of wine I’d list them in my monthly newsletter and, If I found a buyer, I’d clip the ticket by adding 10%.
I was approached by someone wanting to sell a 22-vintage set of Penfolds Grange from 1965-1986. He wanted to sell the wines because he couldn’t drink them without breaking the set. I offered them for NZD $3,000 (including my 10% fee). Vern wanted to buy the set. I recall him saying that he would add a few more vintages before selling it at a profit on the Australian market.
The wines were stored initially in an underground cellar before Vern moved to a new house and installed a temperature-controlled cellar for the Grange and his impressive collection of other wines.
“I collected them partly with an eye on the investment but mainly because owning the precious bottles gave me pleasure. Each year I’d buy a bottle or two of Grange to extend the collection and for consumption. I finally decided to sell when I noticed that the ’68 Grange had sprung a leak with a fill-level that was below the neck.”
Is Grange a worthwhile investment?
“Yes, but it needs to be a long vertical and you need to hold it a long time for the rarity factor to lift the value.”
Vern told me that Grange has jumped from around NZD $400 to NZD $700 about five years ago, which had probably had a positive effect on the value of his collection.
Vern hadn’t tried to calculate his return on investment, but if the average cost per bottle had been NZD $300 it would have given him a net return of around 73% on cost, which is significantly less than he might have earned on the share market or Auckland property market. Accumulating vintages of Penfolds Grange is, however, a lot more fun than buying shares or property.