The Top Reasons to Invest in Fine Wine in 2023



Investors may want to pay close attention to the fine wine market. For one, the market could be worth nearly $1.2 trillion by 2028, according to Market Research Future. Two, “Internet users have significantly increased, and internet usage is rising. The majority of major participants in the market for premium wines and spirits plan to advertise their goods on social media channels.” Three, “there is a higher level of health awareness, followed by a sharp increase in disposable income, increasing people’s purchasing power. These are some reasons that are creating potential opportunities for the industry.” That’s all beneficial for companies like Gaucho Group Holdings Inc. (NASDAQ: VINO), LVMH Moet Hennessy Louis Vuitton (OTC: LVMUY), Vintage Wine Estates (NASDAQ: VWE), Constellation Brands (NYSE: STZ), and Brown-Forman Corp. (NYSE: BFB).

Also, according to Forbes.com, “Depending on whose stats you wish to believe, the US wine industry looks positively rosy: According to Research and Markets’ 2022 U.S. Wine Market Size, Share & Trends Analysis Report by Project, sales of wine (domestic and imported) topped $66.97 billion, with table wines dominating, followed by sparkling wines (most domestic), whose projected sales will rise 7.7% from 2022 to 2030.”

Look at Gaucho Group Holdings Inc. (NASDAQ: VINO), For Example

Gaucho Group Holdings, Inc. (NASDAQ: VINO), a company that includes a growing collection of e-commerce platforms with a concentration on fine wines, luxury real estate, and leather goods and accessories, announced today its growth strategy leveraging its previously announced $44 million ELOC. With this funding now in place, the Company believes it can lay the foundation for growth of its assets in lodging, hospitality, wine & spirits, retail, and e-commerce.

With an approved $44 million equity line of credit, the Company states it now has a funding mechanism for its growth plans in 2023 and beyond. This includes infrastructure expansion for its luxury vineyard estate development, Algodon Wine Estates, such as the build out of residential villas and commercial elements associated with the estate’s sports and hospitality sector, as well as marketing efforts targeting its lot sales program. The Company previously announced that it anticipates its lot sales program can potentially generate $5 Million or more in sales in 2023 alone, and its planned 60-room hotel and spa (which is also slated to include 30-50 residences, and for which the Company seeks to co-brand with a luxury hotel brand) could generate an additional $25 million per year of revenue once complete. With the Masterplan’s addition of 200 more lots, ranging in size from 2.47 acres to 6 acres, the Company anticipates the potential to generate more than $100 million in revenue.

Plans also target the Company’s high end wine products, Algodon Fine Wines, which includes marketing efforts to further increase distribution channels, e-commerce sales and international markets, such as Argentina’s neighbor Brazil, which is the world’s 3rd largest market for online wine sales.

The Company intends to continue efforts to scale the growth of its leather goods and accessories brand, Gaucho – Buenos Aires, which celebrated its flagship opening last year at the Miami Design District, located among the likes of widely recognized luxury retail brands such as Off White, Bottega Veneta, Gucci, and Chanel, and many others. The Company intends to target e-commerce revenue growth with an aggressive marketing campaign, as well the anticipated forthcoming launch of its Resort Collection and a luggage + travel accessories collection, later this year.

Scott Mathis, CEO & Chairman of Gaucho Holdings commented; “Being on the Nasdaq is very important for our company’s loyal shareholders, future growth, and for maximizing exposure. As we grow and scale, we can leverage our stock as currency to accomplish a “rollup” strategy for accretive acquisitions such as additional luxury brands synergistic with our own. This $44 million ELOC can also go a long way for growth. In the next 24 to 36 months our extraordinary real estate project is expected to have a new destination spa, world class gym facilities, an 18-hole golf course expansion, and more vineyard casitas as well. Anticipated for q4 2023, the restaurant renovation and final touches on the upgrade to the winery will allow them to now accommodate weddings and corporate events, and other large gatherings. In addition, the San Rafael airport is being expanded and the runway improved for larger aircraft and more traffic.

These can positively impact our ADRs and occupancy rates, as well as the value of our residential lots. Of our two hospitality properties, one of them currently generates positive cash flow through lease revenues and will be accretive to the company, and we expect the other to have substantial development opportunities. We believe both are in prime areas ripe for development, and we believe the valuation of the real estate is positioned to allow for substantial appreciation in the years ahead. Across all of our companies, we now have the means to up our game and get our story out to the world as we continue to grow.”

Other related developments from around the markets include:

LVMH Moet Hennessy Louis Vuitton, the world’s leading luxury goods group, recorded revenue of €79.2 billion in 2022 and profit from recurring operations of €21.1 billion, both up 23%. All business groups achieved significant organic revenue growth over the year (see table on page 3). Fashion & Leather Goods notably reached record levels, with organic revenue growth of 20%. Profit from recurring operations stood at €21.1 billion for 2022, up 23%. Operating margin remained at the same level as 2021. Group share of net profit was €14.1 billion, up 17% compared to 2021. Operating free cash flow surpassed €10 billion. Europe, the United States and Japan rose sharply, benefiting from strong demand from local customers and the recovery of international travel. Asia was stable over the year due to developments in the health situation in China.

Vintage Wine Estates, one of the fastest-growing wine producers in the U.S. with an industry leading direct-to-customer platform, reported its financial results for its first quarter ended September 30, 2022. Results include Vinesse, LLC acquired on October 4, 2021, ACE Cider, acquired on November 16, 2021, and Meier’s Wine Cellars, Inc. acquired on January 18, 2022. Pat Roney, Founder and Chief Executive Officer, commented, “Our first quarter results represent a solid start to the year as we continue to execute on our growth strategy. We delivered double digit sales growth for each of our business segments and strengthened operations while making critical investments to support our key strategic objectives. We made progress in a number of areas to improve operational efficiencies against headwinds from ongoing cost pressures and supply chain constraints. We still have some work to do and will continue to develop our infrastructure as we scale the Company. We have invested in talent, building strength in our leadership and finance teams and we are effectively integrating and growing our recently acquired brands. Overall, we are driving consumer demand for our excellent portfolio of diversified products while making smart investments to fuel growth.”

Constellation Brands, a leading beverage alcohol company, reported its third quarter fiscal 2023 financial results, which can be found here. For the quarter, the company reported basis EPS of $2.52, and comparable basis EPS of $2.83. Its wine and spirits business delivered strong relative performance across high-end wine and craft spirits portions of the portfolio outpacing corresponding segments of the U.S. and spirits categories. And, according to President and CEO, Bill Newlands, “Our Beer Business continued to outperform the market as the top share gainer for the sixth consecutive quarter. Our Wine and Spirits Business further advanced its strategy with our largest higher-end brands delivering growth significantly above the category segments. Looking ahead, we remain confident that we can continue to build on our strong track-record of solid growth and value creation.”

Brown-Forman Corp. announced that its Board of Directors declared a regular quarterly cash dividend of $0.2055 per share on its Class A and Class B Common Stock. The dividend is payable on April 3, 2023, to stockholders of record on March 8, 2023. Brown-Forman, a member of the prestigious S&P 500 Dividend Aristocrats index, has paid regular quarterly cash dividends for 79 years and has increased the cash dividend for 39 consecutive years.

Legal Disclaimer / Except for the historical information presented herein, matters discussed in this article contains forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially from any future results, performance or achievements expressed or implied by such statements. Winning Media is not registered with any financial or securities regulatory authority and does not provide nor claims to provide investment advice or recommendations to readers of this release. For making specific investment decisions, readers should seek their own advice. Gaucho Group Holdings Inc. paid three thousand five hundred dollars for advertising and marketing services to be distributed by Winning Media. Winning Media is only compensated for its services in the form of cash-based compensation. Winning Media owns ZERO shares Gaucho Group Holdings Inc. Please click here for disclaimer.

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US gets access to 4 more bases in Philippines amid China doubt

By Kyle Aristophere T. Atienza, Reporter

THE PHILIPPINES has given the United States greater access to its military bases, their defense chiefs said on Thursday, amid mounting concern over China’s increasing assertiveness in the disputed South China Sea and tension over self-ruled Taiwan.

The US would be given access to four more locations under the 2014 Enhanced Defense Cooperation Agreement (EDCA), US Defense Secretary Lloyd Austin and Philippines Defense Secretary Carlito Galvez said in a joint news conference at the Philippine military headquarters in Manila.

Mr. Austin, in the Philippines for talks as the US seeks to extend its security options as part of efforts to deter any move by China against self-ruled Taiwan, referred to the Philippine decision as a “big deal” as he and his counterpart reaffirmed their commitment to bolstering their alliance.

“Our alliance makes both of our democracies more secure and helps uphold a free and open Indo-Pacific,” said Mr. Austin, whose visit follows one by US Vice President Kamala Harris in November, which included a stop at Palawan island in the South China Sea.

“We discussed concrete actions to address destabilizing activities in the waters surrounding the Philippines, including the West Philippine Sea, and we remain committed to strengthening our mutual capacities to resist armed attack,” Mr. Austin said, referring to areas of the South China Sea within the Philippines’ exclusive economic zone.

“That’s just part of our efforts to modernize our alliance. And these efforts are especially important as People’s Republic of China continues to advance its illegitimate claims in the West Philippine Sea,” he added.

China said greater US access to Philippine military bases undermined regional stability and raised tensions. “This is an act that escalates tensions in the region and endangers regional peace and stability,” China’s Foreign ministry spokesperson Mao Ning told a news briefing.

“Regional countries should remain vigilant about this and avoid being used by the US.”

The additional sites under the EDCA bring to nine the number of military bases the US would have access to. It has announced it was allocating more than $82 million for infrastructure at the existing sites.

The EDCA allows US access to Philippine military bases for joint training, pre-positioning of equipment and the building of facilities such as runways, fuel storage and military housing, but not for a permanent presence.

Projects at five other Philippine military bases that the US can access under an Enhanced Defense Cooperation Agreement (EDCA) signed in 2014 were almost complete, they said in a joint statement posted on the Philippine Defense department’s Facebook page. These show that the enforcement of the military pact is being fast-tracked, they added.

“Expansion of the EDCA will make our alliance stronger and more resilient, and will accelerate modernization of our combined military capabilities,” they said.

The addition of new EDCA sites would also boost Washington’s humanitarian support for the Philippines during calamities and enable the two countries to “respond to other shared challenges.”

“The Philippine-US alliance has stood the test of time and remains ironclad,” they said. “We look forward to the opportunities these new sites will create to expand our cooperation together.”

Mr. Austin was part of the military under the Obama administration. He was responsible for military operations in the Middle East and Afghanistan and led the US and its allies in battling ISIS in Iraq and Syria. He retired from the army in 2016.

Mr. Austin and Mr. Galvez did not specify the sites that would be opened to US access. The former Philippine military chief had said the United States had asked for access to bases on the main northern island of Luzon, the closest part of the Philippines to Taiwan, and on Palawan in the southwest, near the disputed Spratly Islands in the South China Sea.

Outside the military headquarters, dozens of protesters opposed to a US military presence chanted anti-US slogans and called for the EDCA to be scrapped.

Before meeting his counterpart, Ms. Austin met Philippine President Ferdinand R. Marcos, Jr. and assured him of US support. “We stand ready to help you in any way we can,” he said.

Ties between the United States and its former colony were soured under the previous president, Rodrigo R. Duterte, who made overtures toward China and was known for anti-US rhetoric and threats to downgrade military ties. 

‘STAGING GROUND’
Mr. Marcos has met US President Joseph R. Biden twice since winning a landslide victory in an election last year and reiterated he could not see a future for his country without its longtime treaty ally.

“I have always said, it seems to me, the future of the Philippines and for that matter the Asia-Pacific will always have to involve the United States,” Mr. Marcos told Mr. Austin.

After assuming his Defense post under the Biden government, Mr. Austin led Pentagon’s efforts to quash the rise of right-wing extremism and white supremacy in the military.

“The one selling point perhaps with Austin is he is nominally trying to combat right wing extremism in the US military,” Hansley A. Juliano, a political economy researcher, said in a Facebook Messenger chat. “It’s therefore not unreasonable for civil society groups to engage him in this vein vis-a-vis the US support for human rights and democratization.”

Political analysts have said it is strategic for the US to have EDCA sites in the country’s north due to tension between China and Taiwan, which is just 390 kilometers away from northern Philippines.

“Filipinos must not allow our country to be used as a staging ground for any US military intervention in the region,” Bagong Alyansang Makabayan said in a statement.

“The US is engaged in provocations with China using the issue of Taiwan,” it said. “Allowing US use of our facilities will drag us into this conflict which is not aligned with our national interests.”

The US had a naval base in Subic, Olongapo City until 1991, when the Philippine Senate rejected the renewal of the lease. The decision led to the dismantling of an American air base in Clark, Pampanga. The two sites, which are now economic hubs, are located north of the capital Manila.   

Terry L. Ridon, a former lawmaker and public infrastructure expert, said the Philippine government should ensure that weapons of mass destruction are not stockpiled at EDCA sites.

“EDCA remains limited to agreed locations within Philippine military bases and should remain so until the agreement is jointly amended by Manila and Washington,” he said in a Messenger chat.

Mr. Juliano said Philippine authorities should ensure that EDCA would not enable any intervention in local security policy and would not tolerate any abuses by American forces.

Mr. Marcos’ father, the late dictator Ferdinand E. Marcos, fostered close ties with the US before he was ousted by a popular uprising in February 1986.

Former US president Ronald Reagan granted him asylum, allowing his family’s exile in Honolulu, Hawaii. — with Reuters

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Young people coming into wealth are increasingly seeking services to minimise portfolio risks

Personal Finance

Young people coming into wealth are increasingly seeking services to minimise portfolio risks


Young people coming into wealth are increasingly seeking services to minimise portfolio risks. FILE PHOTO | SHUTTERSTOCK

Young Kenyans are increasingly seeking family wealth advisors and wealth managers as they explore reliable and secure investment options.

Behind a growing market for wealth management, a recent report shows are young investors and wealth heirs, outlying the previous trend where it was a reserve of institutional clients.

The high demand for these professionals to help minimise portfolio risk has seen asset managers such as fund managers, brokerages, and banks rush into the wealth management space, dotted with family offices.

“That is the trend that is coming in. We are joining the bandwagon because worldwide, wealthy people don’t just invest for themselves,” says Elizabeth Irungu, head of asset management at Absa Bank Kenya.

She adds: “The country has grown to that point where the consumption of investment management services is going to the individual which is quite interesting because if you look at the developed markets, the high net worth individuals comprise a big percentage of players in the investment space.”

The Standard Chartered’s Wealth Expectancy Report 2022 shows about 35 percent of Kenyan investors use professional wealth managers while 62 percent of polled global investors were primarily managing their finances.

On average, across the 14 markets surveyed, younger investors (aged 18-35 years) representing 63 percent of the survey respondents are more likely to use a professional wealth manager compared with 39 percent in the 55+ years bracket.

The wealth management shift is a marked shift for traditional asset managers working within a defined framework, like the pension mandates, and licensed by regulators.

In asset management, the investment policy statement is aligned with the regulatory framework compared to wealth management which is specific to an investor, hence the sprout of family offices.

“Wealth has everything to do with individuals, and each of them has different needs and unique aspects that need to be considered in building their wealth,” says Ms Irungu.

Investment managers advise high-net-worth individuals when creating or managing their investment portfolios.

“There are many benefits. As a wealthy person, you don’t want to be the one making determinations. You want your manager to do all the work for you,” Ms Irungu adds.

“You want your manager to do the groundwork before committing capital, because capital is expensive and is also looking for a return.”

Read: What wealthy Kenyans are buying as Christmas gifts

The StanChart report adds that on average, investors taking advantage of professional wealth advice were more likely to have diversified portfolios and higher holdings in sustainable investments.

The recommendations from investment managers are also based on fundamental research, risk analysis, and assessment that assist in making better decisions.

Wealth managers, Ms Irungu notes, also carry out broad analyses of local, and international markets, to increase available options and their interplay.

BDLELIZABETHIRUNGU

Elizabeth Irungu is the head of asset management at Absa Bank Kenya. FILE PHOTO | POOL

“At the end of the day, we are creating an optimal portfolio that is bespoke to you,” says Ms Irungu.

Wanja Michuki, a family wealth consultant and adviser, says more business founders and parents are seeking help because of the increased frequency of failed succession cases.

“Family enterprises are complex systems and members may not be able to discern the patterns that are destructive to their families and businesses and wealth,” Ms Michuki says.

“A family that is looking at establishing a multi-generational legacy should engage a family wealth adviser who understands the family, ownership, and enterprise sub-systems and can help them develop healthy relationships within and across those systems so that they can thrive.”

The families also understand that lawyers and wealth managers will not necessarily ensure that their kin do not end up in disputes once they have passed on, she adds.

Ms Michuki coaches families on mindset change as part of the process of getting them to work or hold assets together successfully.

The majority of these families run businesses or investment portfolios that generate wealth, while also employing some of the family members.

Contrary to popular perception, Ms Michuki says until they inherit the wealth, most heirs from wealthy families are middle-class.

And so, it is mostly members of the second generation (inheritor) that seek a family wealth adviser as they experience the challenging dynamics of family wealth.

“A good family wealth adviser will work inside of a multi-disciplinary team that combines legal, financial, organisational and behavioural consultancy and advisory services for the benefit of the individual/family client. If a family has co-created a wealth plan (the ideal scenario) and is working with a wealth manager, such as a fund manager or a private bank, chances are they will each have their own relationship manager that handles their personal accounts. However, the distributable wealth is generated from the assets held by the family and managed by the wealth manager.”

Ms Michuki says that the newly wealthy Kenyans are seeking to know how to grow and sustain their wealth, how to make the family work when wealth is involved, and how the family enterprise will take care of their families when they die- depending on the circumstances of the family or the individual.

Read: Rich Kenyans sit on Sh922bn in dollars as shilling weakens

The demand for wealth managers among young Kenyan investors comes amid concerns of a hit on the global investment landscape such as recessionary fears that challenge investors’ ability to manage their wealth.

The StanChart report shows 50 percent of Kenyan investors cited inflation, uncertainty in the global economy (33 percent), and the threat of recession (15 percent) as their top concerns.

With proper wealth management, they hope to save for retirement, a top priority of Kenya’s rich surveyed (50 percent).

Others cited children’s education and future, lifestyle, and health, and the need to ensure cash flows to cover daily living expenses and new projects.

“Our research reveals that they are making changes to their portfolio allocations in response to these challenges, but it is important that they make decisions aligned with their objectives and the external environment,” Paul Njoki, StanChart head of affluent banking and wealth management in Kenya and East Africa said.

To outpace inflation, 61 percent of global investors are looking to reduce their cash holdings, compared to 67 percent in Kenya.

Standard Chartered predicts that global cash allocations will fall from 26 percent in 2022 to 15 percent in 2023, as indicated by investor responses.

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Here’s what the Federal Reserve’s 25 basis point interest rate hike means for your money

The Federal Reserve raised the target federal funds rate for the eighth time in a row on Wednesday, in its continued effort to tame persistent inflation.

At its latest meeting, the central bank approved a more modest 0.25 percentage point increase after recent signs that inflationary pressures have started to cool.

“The easing of inflation pressures is evident, but this doesn’t mean the Federal Reserve’s job is done,” said Greg McBride, chief financial analyst at Bankrate.com. “There is still a long way to go to get to 2% inflation.”

What the federal funds rate means to you

How higher interest rates can affect your money

1. Your credit card rate will rise

Since most credit cards have a variable rate, there’s a direct connection to the Fed’s benchmark. As the federal funds rate rises, the prime rate does, as well, and your credit card rate follows suit within one or two billing cycles.

“Credit card interest rates are already as high as they’ve been in decades,” said Matt Schulz, chief credit analyst at LendingTree. “While the Fed is taking its foot off the gas a bit when it comes to raising rates, credit card APRs almost certainly will keep climbing for at least the next few months, so it is important that cardholders continue to focus on knocking down their debt.”

Credit card annual percentage rates are now near 20%, on average, up from 16.3% a year ago, according to Bankrate. At the same time, more cardholders carry debt from month to month while paying sky-high interest charges — “that’s a bad combination,” McBride said.

At more than 19%, if you made minimum payments toward the average credit card balance — which is $5,474, according to TransUnion — it would take you almost 17 years to pay off the debt and cost you more than $7,528 in interest, Bankrate calculated.

Altogether, this rate hike will cost credit card users at least an additional $1.6 billion in interest charges in 2023, according to a separate analysis by WalletHub.

“A 0% balance transfer credit card remains one of the best weapons Americans have in the battle against credit card debt,” Schulz advised.

Otherwise, consumers should consolidate and pay off high-interest credit cards with a lower-interest personal loan, he said. “The rates on new personal loan offers have climbed recently as well, but if you have good credit, you may be able to find options that feature lower rates that what you currently have on your credit card.”

2. Mortgage rates will stay higher

Rates on 15-year and 30-year mortgages are fixed and tied to Treasury yields and the economy. As economic growth has slowed, these rates have started to come down but are still at a 10-year high, according to Jacob Channel, senior economist at LendingTree.

The average interest rate for a 30-year fixed-rate mortgage is now around 6.4% — up almost 3 full percentage points from 3.55% a year ago.

“Relatively high rates, combined with persistently high home prices, mean that buying a home is still a challenge for many,” Channel said.

This rate hike has increased the cost of new mortgages by around 10 basis points, which translates to roughly $9,360 over the lifetime of a 30-year loan, assuming the average home loan of $401,300, WalletHub found. A basis point is equal to 0.01 of a percentage point.

“We’re still a ways away from the housing market being truly affordable, even if it has recently become a bit less expensive,” Channel said.

Other home loans are more closely tied to the Fed’s actions. Adjustable-rate mortgages, or ARMs, and home equity lines of credit, or HELOCs, are pegged to the prime rate. Most ARMs adjust once a year, but a HELOC adjusts right away. Already, the average rate for a HELOC is up to 7.65% from 4.11% a year ago.

More from Personal Finance:
64% of Americans are living paycheck to paycheck
What is a ‘rolling recession’ and how does it impact you?
Almost half of Americans think we’re already in a recession

3. Auto loans will get more expensive

Even though auto loans are fixed, payments are getting bigger because the price for all cars is rising along with the interest rates on new loans, so if you are planning to buy a car, you’ll shell out more in the months ahead.

The average interest rate on a five-year new car loan is currently 6.18%, up from 3.96% last year.

The Fed’s latest move could push up the average interest rate even higher, although consumers with higher credit scores may be able to secure better loan terms or look to some used car models for better deals.

Paying an annual percentage rate of 6% instead of 4% would cost consumers $2,672 more in interest over the course of a $40,000, 72-month car loan, according to data from Edmunds.

“The ever-increasing costs of financing remain a challenge,” said Ivan Drury, Edmunds’ director of insights.

4. Some student loans will get pricier

Federal student loan rates are also fixed, so most borrowers won’t be affected immediately. But if you are about to borrow money for college, the interest rate on federal student loans taken out for the 2022-23 academic year already rose to 4.99%, up from 3.73% last year and any loans disbursed after July 1 will likely be even higher.

If you have a private loan, those loans may be fixed or have a variable rate tied to the Libor, prime or T-bill rates, which means that as the central bank raises rates, borrowers will likely pay more in interest, although how much more will vary by the benchmark.

Currently, average private student loan fixed rates can range from just under 4% to almost 15%, according to Bankrate. As with auto loans, they also vary widely based on your credit score.

For now, anyone with existing federal education debt will benefit from rates at 0% until the payment pause ends, which the Education Department expects to happen sometime this year.

the savings account rates at some of the largest retail banks, which have been near rock bottom during most of the Covid pandemic, are currently up to 0.33%, on average.

Also, thanks, in part, to lower overhead expenses, top-yielding online savings account rates are as high as 4.35%, much higher than the average rate from a traditional, brick-and-mortar bank.

Rates on one-year certificates of deposit at online banks are even higher, now around 4.75%, according to DepositAccounts.com.

As the Fed continues its rate-hiking cycle, these yields will continue to rise, as well. However, you have to shop around to take advantage of them, according to Yiming Ma, an assistant finance professor at Columbia University Business School.

“If you haven’t already, it’s really important to benefit from the high interest environment by getting a higher return,” she said.

Still, because the inflation rate is now higher than all of these rates, any money in savings loses purchasing power over time.

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