Les 5 du Vin

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Canary Wharf Vintners, Encarta Fine Wines, Premier Cru Fine Wine Investments: more bad news for wine investors

11 Commentaires

Lafitebs

Château Lafite

Within Europe wine investment is perhaps largely a British disease. Which is fortunate as recently there has been a seeming unending stream of bad news for investors.

For a start despite claims from some companies of big profits from wine investments every year, the reality is rather different. If you had bought a case of 2005 Château Lafite in June 2010 you could well find your wallet thinned by nearly 50%.

A case of Lafite (12 bottles), which in June 2010 would have cost £10,000, can now be purchased for just £5750 – – down by £4250. Add to this the cost of storage: £60 over four years and if the wine is with a wine investment management company that charges an annual management fee – say 1.75% – then £10,000 in June 2010 has become £4898. Not a great investment by any stretch of the imagination!

The last few months has seen a succession of ‘wine investment’ companies going bust. These include European Fine Wines Ltd, En Primeur Ltd, Encarta Ltd and Canary Wharf Vintners Ltd. All these have gone down leaving investors out of pocket to varying degrees.

The latest scandal involves Premier Cru Fine Wine Investments Ltd, which is in the process of passing their clients’ portfolio over to Cult Wines Ltd. Unfortunately the stricken company appears to have had little concern for their clients and their pension hopes. Premier Cru clients are being switched to Cult Wines Ltd and are expected now to pay 5% of their portfolio’s value to Cult Wines Ltd – a very high management fee for years one and two.

Also Premier Cru clients are now finding that there are ‘shortages’ in their wine portfolios. It is not yet clear whether this is down to incompetent administration, whether Premier Cru’s management pillaged their clients’ portfolios or whether it is a mix of the two. Amazingly the shortage from good vintages like 2009 are being made up by Cult Wines Ltd with 2013 en primeurs, arguably one of the worst Bordeaux vintages of recent times.

The lesson appears to be either avoid wine investment or if you do decide to go for wine investment make sure that your wines are stored in your own account so that you cannot be passed over to another company with little option to refuse. With your own account you won’t suddenly find there are ‘shortages’.

Jim+Umbrellascropss

Auteur : Les 5 du Vin

Journalistes en vin

11 réflexions sur “Canary Wharf Vintners, Encarta Fine Wines, Premier Cru Fine Wine Investments: more bad news for wine investors

  1. Again, we may just repeat the economic and financial basic : any good to be collected that may give you in the future a return by 2 figures has inside its own risk. Wines, cars, paintings, stamps, furniture, watches.

  2. I have a zero risk technique: I drink all the wine I buy!

  3. Denis, I dammit beat you: I drink even wine which I don’t buy!

  4. I like Denis’ philosophy. And I prefer wines that are meant to be drunk. Could you name a good winemaker who purposely makes wine for investors, to be sold and resold with a high margin, never to leave its protected vaults, never to be drunk?
    The winemakers I know make wines to be enjoyed and shared, with a good meal.
    To me, this investing stuff is like a bad habit. And Mr Mauss’s comparison with art is quite accurate – although you don’t drink a painting, you can enjoy it everyday – unless you hide it in a safe, like some do.

  5. Mmmm Luc, shouldn’t winemakers be taxed for this? I mean, be submitted to an extra tax because they can enjoy freely the wine they make?

  6. Upon sending my comment, I realized it could be seen as a double-entendre. I did not only mean drinking my own wine, but rather more the one friends and acquaintances so readily offer me, either as a present, or to be drunk with them.
    Further more, when a car mechanics fixes his own vehicle, he doesn’t pay tax on the job. And when a MD performs euthanasia on his boaring relatives (wife, mistress, kids, parents …), he is not charged extra for that.

  7. Merci – many wise words here!

  8. … with possibly one slight exception….

  9. There are obvious links between wine and art investment, as Decanter reveals: Canary Wharf ‘s director Enver Deen is said to offer both: see here: http://www.decanter.com/news/wine-news/587375/encarta-fine-wines-ltd-enters-liquidation

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