THE BASICS OF PROPER WINE STORAGE are temperature control (cool and consistent), humidity control, and absence of direct sunlight and vibration, but unless you store your wine in a deep cellar, these conditions will not occur naturally. They can, however, be obtained through construction. To gain further insights into the process of building a proper wine cellar I spoke to Jay Rosen, the owner of Washington Valley Cellars, a New Jersey company dedicated to construction of distinctive wine cellars.

Whether the wine cellar is part of the initial design of a house or is being retro-fitted into an existing room, the first requirement is to find the dark and vibration free location. After that your builder can provide the rest through humidity controlled refrigeration, good insulation, and an effective vapor barrier. I am going to say that last one again—an effective vapor barrier. You need that to prevent moist air from entering the cellar. If it does, it meets the cooled air and condenses, and that leads to mold. Now imagine mold rotting labels, rotting the cardboard and wooden cases, rotting the wooden racks, escaping the cellar and infecting your home. Okay. This is too terrible, so we’re going to stop imagining now. The message is that proper refrigeration—that keeps humidity at the optimal level—and a good vapor barrier are required to protect your wine and prevent mold.

Temperature and humidity, though, are not the only important considerations. The type of lighting is important as well. Low heat lights, such as LED, are better than halogen or incandescent, and fluorescent lighting should be avoided not only due to heat but also high levels of UV rays that can damage wine. If the cellar is above grade you also need to make sure that the floor is sufficiently supported and does not collapse under the weight of the wine. 

All set? Not quite. Your new, beautiful wine cellar depends on electricity to maintain the storage temperature of your wines, and you absolutely need to protect it against power outages. The service contract on the cooling system should include 48-hour site visit and remediation, and a back-up system, whether a generator or battery, can provide the short-term power needed to keep your cooling system running until the contractor gets there.

While all these considerations may seem daunting, they are routine to an expert wine cellar contractor, such as Jay. So, while you may be tempted to do it yourself (note that I said you might be tempted. I’m not!), with a valuable wine collection at stake leaving it to the pros is probably a good idea.


IN 1989, when William Sokolin famously broke a purported bottle of 1787 Chateau Margaux previously owned by Thomas Jefferson—a fake it turned out, he did more than break a potentially valuable bottle of wine. He also probably broke the law.

Sokolin had taken the bottle on consignment from an English merchant and was trying to sell it in New York. In 1989, however, it was still illegal to sell wine in New York on consignment. It was also illegal to sell wine at auction. A secondary market existed, but it was a shadowy world of sales among collectors, all illegal. Auction sales finally became legal in New York in 1993, and the first sale was held in 1994.

Fast forward thirteen years. In 2007 there were five auction houses in New York alone that sold in total almost $150 million of wine. With impressive growth New York began outselling London, the previous center of the auction wine trade, in 1999. From that year on the U.S. dominated the global wine auction market, until 2010 that is. In 2008 Hong Kong lifted its 40% import tax on wine, and its auction market exploded. Within one year Asian wine auction totals had surpassed Europe’s, and in two years they surpassed those of the U.S. The global market readjusted starting in 2013, with the U.S. regaining the primary spot and Asia receding to second place, albeit by a wide margin over Europe.

The wine auction market is, evidently, demonstrably young and subject to rapid changes. Globally the market almost tripled in total revenue from 2005 to 2011, and it has declined 30% since that peak. The period of great growth between 2005 and 2011 was led primarily by Bordeaux, both in the volume of wines coming to market and the prices realized. This situation changed dramatically in 2011. Bordeaux underwent a market correction following a period of intense Asian interest, with 2012 prices auction prices of some wines reaching six year lows. This year also marked the ascendancy of Burgundy, which began to capture the imaginations and bids of collectors. While Bordeaux has spent the past four years struggling to regain its prior stature and pricing, Burgundy has gathered strength and produced record prices each year. 

While this makes for interesting observation, the uncertainty is whether these are buying or selling opportunities. You could sell Burgundy now, reasoning that the record prices cannot be sustained, but then had you applied that analysis and sold in 2014 you would have missed out on additional appreciation. Similarly, the relative softness of Bordeaux could be seen as an opportunity. Based on previous auction demand Bordeaux has been undervalued since the 2011 correction, unless, that is, the 2010 prices were a phenomenon not likely to reoccur any time soon. What is certain, however, is that the development of the global wine auction market is vibrant and dramatic and that a wise investor will maintain a careful and critical eye.


IS THERE A WINE COLLECTION? That is often a question worth asking.

More than ever high net worth individuals own wine collections, with a recent survey by Barclays finding that roughly 25% of such people own significant wine collections. For example, our practice recently appraised a cellar in a disputed divorce with an appraised value of over $3 million. This was an extensive cellar of over 1,200 cases, but with prices of aged wines often topping $200 per bottle it does not take much for a cellar to become an important asset. 

In the context of insurance, divorce, estate and other situations, therefore, the existence and significance of a wine collection should be examined, much as one would for art, jewelry and other collectibles. Whether in the context of risk management or pursuant to an unfortunate event, all potentially valuable assets need to be accounted for, wine among them.

Establishing the existence of a wine collection, however, does not end the analysis. There are several different standards by which wine can be appraised, and the disparity in valuation can be significant. For example, some people would argue that a collection’s value is its full retail price, also known as Retail Replacement Value. This is the highest amount required to replace the wine with its precise equivalent and includes, as is relevant, all taxes, premiums, commissions, etc. Others, however, might assert that the Marketable Cash Value should prevail. This is the probable proceeds of a sale - perhaps forced sale - less the expenses incurred in selling the wine and could be as little as 15-20% of the Retail Replacement Value. 

Accurately valuing a wine collection requires full knowledge of and familiarity with the wines in the collection and the various standards for appraising them. Feel free to email me at for more information.