The Premier Bordeaux Wine Company

Enquiry:

'I have been contacted by this Company (The Premier Bordeaux Wine Company) and sent a somewhat impressive brochure. Wine is not an area I have invested in, so could you kindly give me advice on this Company.'

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My response:

The Premier Bordeaux Wine Company was incorporated on 3rd December 2009 and its registered office is 788-790 Finchley Road, London NW11 7TI.

Its trading address from its website: www.tpbwc.com is

111 Buckingham Palace Road,Victoria, London, SW1W 0SR. Telephone: 08000 114 219
Email: : info@TPBWC.com
The website was registered on 24th June 2009

(On 2nd December 2009 Premier Bordeaux Wines Ltd, believed also to offer wine investments, was incorporated with a registered office also at 788-790 Finchley Road, London NW11 7TI. Its website is 'undergoing total redevelopment'.

Clients are directing to their trading address: Premier Bordeaux Wines, 145-157 St John’s Street London EC1V 4PY
Tel: 0800 0114 219
Fax: 0845 226 4624
Email: info@premierbordeauxwines.com)

The Premier Bordeaux Wine Company's brochure suggests that the company has been around for rather longer than public records show:

Some extracts from the The Premier Bordeaux Wine Company brochure:

'The Premier Bordeaux Wine Company are passionate about the fine wine market and we are delighted with the tax free returns that we have achieved and continue to achieve on behalf of our clients. Our global network of contacts and strategic partners allow us to source the rarest and most sought after wines on behalf of our clients and puts us in the perfect position to sell their wine at any time.’

‘The Premier Bordeaux Wine Company is keen to secure large amounts of en primeur wines so that we have access to as many of the world’s greatest wines to sell at a future date. Securing wines at this stage provides us with the best opportunity to fulfil future orders.

Of equal importance, purchasing en primeur in significant quantities affords us significant purchasing power in the market meaning we can purchase wines at the best possible price.’

Their 'Income Investment Model that Yields 8.9%+ per annum':

• ‘Up to 500 clients enter agreements with us on current and future en primeur campaigns by purchasing wine futures (each client is the legal owner of the wine he/she has purchased)
• By buying en primeur wines in substantial quantities, TPBWC can obtain the most competitive price. Price differentials can vary by up to 10%.
• TPBWC pays participating clients 8.9% of the total purchase price* (standards charges) in order to repurchase the wine at the same total purchase price in three years time (similar to a Repo transaction in the money markets).
• After three years, TPBWC buys the wine back at the original purchase price.
• The wine is independently valued.
• If the wine’s value has increased from the total purchase price then TPBWC pays the client/seller a further 60% of any upward price movement from the (purchase price plus standard charges). TPBWC retains 40% share of capital growth.
• If the wine’s value has remained the same as or decreased from the purchase price, then no further payment is made. The client has already received an 8.9% return on his/her investment.
• TPBWC either holds or sells this wine to a third party.
• The process is repeated for subsequent en primeur campaigns.

(Elsewhere in brochure TPBWC gives an example of how the scheme works and undertakes to pay clients 8.9% of their purchase price 'within 30 days of receipt of payment' and a further 8.9% 'within 1 year and 30 days of the purchase date'. Then a further 8.9% a year later and three years after the original purchase date TPBWC buys back the wine at the original purchase price and within 30 days of buy-back a further cheque – 60% of the increase in value.)

From public records The Premier Bordeaux Wine Company has no track record. Although each client is the legal owner of wine purchased, there are elements of their Income Investment Model that might be construed by the FSA as a collective investment and therefore require FSA authorisation, which they do not currently have. If this was an FSA approved scheme it is unlikely that TPBWC would be permitted to make the 8.9% guaranteed claim.

In the FAQ section of the brochure is the question: 'What if TPBWC goes bust?'
Answer: 'The Premier Bordeaux Wine Company is run on solid business principles and is not indebted to banks or third parties. Overheads are kept to a minimum and our focus is always long term. However, even if the worst case scenario materialised and TPBWC did 'go bust' clients funds are secure. All wines are allocated by the case to individual clients at the time of purchase and would be easily distinguished by the official receiver.'

Unfortunately as TPBWC was only founded at the beginning of December 2009 the company has naturally not yet been required to file any accounts. Furthermore experience shows that it can often be far from straightforward identifying an individual's wine when they are kept in a company's umbrella account if the company has gone bankrupt.

For en primeur purchases this becomes a nightmare because it is impossible to identify a client's wine when it is part of a barrel of still maturing wine. In a number of cases when en primeur companies have gone bust, their clients have lost all or most of their money.

My advice
I would not consider buying wine, especially en primeur, from The Premier Bordeaux Wine Company nor signing up to their Income Investment Model.