LIQUID INVESTMENTS
MICHAEL FRIDJHON: Small is the way to go for SA’s wine investment market
‘Potentially, Boekenhoutskloof and Porseleinberg could breathe life into an investment market’
As the economy plunges ever deeper into the worst recession in 35 years, one segment of the wine industry seems sufficiently unperturbed by trading conditions to be debating the issue of investment-grade wine.
This is not the first time this high-end nirvana has been discussed. Cape producers look enviously at their counterparts in Bordeaux and calculate the cash flow benefits of selling a sizeable chunk of the crop into a futures market.
They forget that this structure — developed over centuries — comes with a particular set of circumstances. For all the advantages of early sales, there are margin losses to middlemen and a pipeline that needs to have been filled before there’s any benefit in emptying it at the consumer end of the trade. Ryan Mostert is the wine maker for a very successful Swartland brand, Silwervis, which has been doing very well selling small volumes into a niche market. The cellar has released a premium shiraz called Terracura — spicy, intriguing, fine and not overly peppery. It has all the trappings of a cult wine in the making. One of the Silwervis shareholders is Roland Peens, whose day job involves selling ultra-premium wines — local and imported. Peens is in the unusual position of being a broker and brand owner.
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