Storage and provenance
To ensure your collection age in ideal conditions, it is important to store fine wines in a temperature and humidity-controlled storage with consistent state. A sizeable, cold, and damp cellar at home would be the ideal place to store a collection. You can ensure ideal conditions for your collection, while at the same time allowing easy physical access to your wines, and experiencing the emotion of seeing your valuable collection grow and mature. Unfortunately this may not be a practical option for most of us, particularly in Hong Kong! Until your ideal home wine cellar is built, one can consider the below alternatives.
Wine fridges
Premium wine fridges in the market can potentially provide ideal conditions for long term ageing. It also allows the collector an easy physical access to the wines. This form of storage can be excellent particularly for the collector with consumption primarily in mind. The downside, however, is that scalability of the collection is limited, and if one’s tastes change in the future reselling the wines can be more problematic as the provenance of these wines can be questioned by potential buyers.
Professional storage
Professional storage is what most collectors choose as the alternative, especially if the investment angle is important. Professional storage with trusted storage providers allows your collection to age in ideal condition, and also provides confidence for potential buyers of the provenance of the wines. Reputable professional storage providers often have efficient online systems to allow collectors to peruse their wines and to request for transfers or delivery with ease. Some may even offer valuation services for collectors with the investment angle in mind.
what is “in bond”
It is also important to understand the distinction between wines stored “in bond” or “out of bond”. Wines stored in bond are wines that get sent directly to an in bond warehouse from a producer before any duties or taxes have been paid. You only have to pay duties or taxes when you decide to move such wines out of bond, to your home for example. If you decide to sell in bond wines in the future, the buyers can also avoid paying duties or taxes unless they withdraw the wines to an out of bond location. Even if you buy wines with the full intention to consume in the future, in bond warehouses typically have ideal conditions for ageing wines, and you would typically only have to pay duty / taxes at your original purchase value even if the value of the wines have increased by the time of withdrawal.
The UK has a long tradition of storing wines under bond, and since Hong Kong abolished wine duty in 2008, it can also serve as an Asian hub for wine storage and trading going forward. For Asia based collectors, it can be advantageous to store wines in either the UK or Hong Kong rather than one’s own region to delay duties on tax, to benefit from professional storage condition and the provenance it implies, and to take advantage of potential trading opportunities.