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Fine Wine Scams, Frauds and Dodgy Deals

As I mentioned in my Blog on Friday I recently came across a dodgy deal and promised to warn you about it. With the fine wine market booming there seem to be no end of suspect companies setting up in business and taxing the wallets of would be investors which infuriates me. Investing in wine is becoming more popular as people realise that fine wine is no longer an alternative investment – indeed recent articles in the press have been advocating that fine wine should be part of your portfolio. However you have to be wary and make sure that if you are parting with your money that you do so wisely and to a company that is trustworthy. For heaven’s sake DO NOT listen to wine investment companies who cold call you!

This particular deal really annoyed me as the company concerned seems to be legitimate but is operating at rip off levels. I am not going to name names but the company is based in Surrey and Jim Budd (who runs the brilliant site www.investdrinks.org) has already encountered them. Jim writes on the pitfalls of wine investment and keeps a regular eye on suspect companies who are dealing in this world. Check out his Blog here.

This company’s brochure is offering two 2008 wines Mouton and Lafite. It was the prices at which they bought the wines that made me do a double take . . . they were extortionately over priced at purchase price leading me to believe that they either do not know what they are doing buying at those prices . . . or they are being economic with the truth about both the purchase and valuation prices.

They listed the wines as being bought in June 2009. Lafite was purchased at £6800, according to this company it’s current value is £10000 and this represents 47% growth. Mouton was purchased at £6150, current value £9000, representing 46% growth. Pardon???

Now I also bought these wines in June 2009 at £1417 and £1812 respectively and based on today’s Liv-ex valuation the wines are worth £2750 and £5056 a case!!!

The price that this company “say” they bought the wines for means that once you have put their management fee of 15% in top of their valuation figures their unsuspecting customers will have to pay £10350 and £11500 for wines which are worth a fraction of the price!!!

I did a little checking up on this company and what is confusing is that this company seems to have several operations – they were trading under another name in the late 1990s and also have an online wine exchange under another name which dates to 2001. Their current website was set up in May 2008.

I am not an investigative journalist but I do know the wine business well and I smell a rat. I will be forwarding my findings to Jim Budd and will leave him to take up the challenge.

The message that I want to get across is that you must be extremely careful! Companies like this are very misleading and misinformation is dangerous. There are several ways of checking out wine merchants and wine funds – you can check prices at www.wine-searcher.com and www.liv-ex.com and I highly recommend Jim’s site as a method of looking up suspect dealers.

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10 Responses to Fine Wine Scams, Frauds and Dodgy Deals

  1. Ricky says:

    I also have had a lot of cold calls from wine investment companies, I was considering investing till now, I am unsure.

    Regards
    Ricky
    http://www.wealthisvip.com

  2. Hi Nick,

    Thanks for the advice.
    I am an investor, Forex trader and also educate people on the how to become and stay wealthy the real way. Solid, well tested investments with varying degrees of risk and of course returns (no overnight made up rubbish!), also how to keep your wealth with efficient tax structures to protect your assets.
    I personally invest in FX managed account, property and gold. I now wish to diversify into the investment world of wine as it has good tax benefits and seems to have a slow and steady return.

    The company that contacted me is Bordeaux Fine Wines. Before I had read your reply I went to meet them at their offices to check them out and see if I had a good vibe about them and make sure they were not a couple of lads in a bedroom with a nice printer and headed paper, cold calling victims.
    I have to say I had a very good feeling about them and I was willing to proceed with them as my broker.
    They are offering Chateau Cos d’Estournel 2005 for £2,200 per 12 bottle case including bonded storage.
    I have seen that I can purchase this cheaper but how could I sell it again?
    What do you think?

    Thanks in advance for your reply.

    Kindest Regards
    Ricky
    Director
    http://www.wealthisvip.com

    • Nick says:

      Hi Ricky, thanks for getting in touch – I’d be happy to help & advise where I can. Please give me a call on 0800 8766958 and we can discuss your options :-)

      Cheers

      Nick

  3. dennis ward says:

    have you had any dealings with VINTNERS OF LONDON VIN-X OR THE PREMIER BORDEAUX WINE COMPANY. i aggree with you about the cold calling.

  4. john kerr says:

    I have invested with The Premier Bordeaux Wine Company,having been recommended it by a friend! Initially they were Alpha Invest Worldwide,and Andrew Miles, and then TPBWC,and Stephen Williams Since 2008 about £25K invested, and in January 2011,problems appeared, and a company called Solphena wrote on behalf of Sole Trader Spyros Constantinos,with a view to offering Debentures on behalf TPBWC. I,ve contacted Action Fraud and Crimestoppers, and there is some correspondence on Jim Budd’s blog

    • Nick says:

      Thanks for the heads up John, I’m sorry that you have been caught up in this. With the boom in wine investment caused by Asia a couple of years ago a lot of wine investment companies sprang up that are now going bust, and of course fraudsters also took advantage. It makes my blood boil but there is little I can do apart from issue warnings to folks not to deal with these companies and to check with bona fide wine merchants in the trade and of course, Jim Budd. Good luck and best wishes, I hope this will be resolved properly for you.

      Nick

  5. Mrs Yvonne Evans says:

    My late husband invested in Bordeaux fine wines about two years ago, after being cold called. I suspected it was a scam but my husband still went ahead. Tonight I received a call from a man calling himself Harvey Speck, saying that his company represents 280 investors in this wine company, which has gone into liquidation and the wine is coming back into this country on 15th November. Of course, the purpose of his call was to extract money from me to pay the costs of bringing my wine back and wants the money up front, amounting to over £1000. This I flatly refused and he quickly terminated the conversation. I don’t want other people to be taken in by this scoundrel. Also, if its true that Bordeaux fine wines is in liquidation, does this mean that I have lost all the money, which this man said amounts to £13,000? Please help me.

    • Nick says:

      Hi Yvonne, I’m not sure which company your husband invested in? DON’T hand over any money to these people if the company is in liquidation. Your best bet is to contact Jim Budd who runs http://www.investdrinks.org/ and give him your details as he keeps a record of dodgy dealers. His email is budmac@btinternet.com. I hope this helps!

      Nick