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Friday, 16 April 2010

Jancis Robinson MW: Bordeaux 2009 - don't part with a penny!

Excellent warning from Jancis not to part with any money for 2009 Bordeaux en primeur before prices have been released and allocations secured. 

'16 Apr 2010 by Jancis Robinson
Shocking tales are emerging of opportunistic entrepreneurs trying to persuade inexperienced wine buyers to invest in 2009 Bordeaux before any serious prices have even been released - let alone any allocations made. It is a familiar and justifiable practice among well-established primeur merchants such as the UK specialists we list here to ask their customers to submit wish lists. But because there has been such hullabulloo about the 2009s, even in the mainstream media, some lurkers on the periphery of the wine trade have been tempted to try to part innocent investors from their money even at this early stage. They are being...'
to read the rest you will have to subscribe to Janicis' Purple Pages

*

Another dubious claim: invest in 2009 petit châteaux Bordeaux!

The Telegraph ran a piece on wine investment yesterday, which concluded thus:

'Simon Staples, sales director at wine merchants Berry Bros & Rudd, said wine started to catch on as an investment in 1996, a top year in Bordeaux, but really took off from 2003. 

During the financial crisis, investor interest continued to rise because wine, like gold, is a tangible asset. Prices dipped after Lehman Brothers collapsed in September 2008 but picked up again from the middle of last year as confidence returned to the City. Prices of top Bordeaux at Berry Bros are also being driven by huge Chinese demand.

"China has a new thirst for the top 20 brands from Bordeaux," Mr Staples said. "Lafite is going up 15pc or 20pc a month in just about every vintage."


Start your investment with a 2009 Bordeaux from Telegraph Wines'

If you click on Telegraph Wines you go to an offer of 2009 petit châteaux
from Averys of Bristol (owned by the UK's largest wine mail order company. These wines may prove to be an investment in pleasure but they will certainly not be a financial investment. Misleading and irresponsible both by the Telegraph and Avery's of Bristol particularly given that the ad came immediately after an article trumpeting the financial returns possible from top Bordeaux.     



28 comments:

  1. I see your point on this Jim and yes I totally agree that the wines listed on

    http://www.telegraphwine.co.uk/containedoffer.pasp?code=tw583&cid=homepage%7Ctw583&mrc=tw583&brand=TGRAPH&mscssid=9E762AF74C3849AA9ACD27DB3FB789EA&utm_source=tmg&utm_medium=article_7588664&utm_campaign=wineshop

    would NEVER be wines to invest in but it’s not as misleading as you claim. I think the only thing I can see wrong with this article is the last line on the article by Sean Farrell. Let’s be fair, I'll make a bet with you that it had nothing to do with him and it’s a link put in by the IT people to the wine club page.

    Yes it’s a bit stupid but there is nowhere on that page that says "these wines below are for investment"

    Personally the terms mountain and molehill come to mind, I do think you have massively overreacted and its rather irresponsible of you to do this. I agree with your basic message here but not the way you have gone about it. Your blog post here looks like you are calling the Telegraph Wine Club a bunch of morons and con men. One day someone will turn around and sue you for libel.

    I do like to read your website and do agree with most of the things you write but please be more responsible.

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  2. Anon. Thanks for your comment.

    My objection, which I thought I had made clear, was to the advert and not to the article by Sean Farrell. We are both aware that the placing and wording of the ad would have had nothing to do with him.

    Nor did I in any way make any comment about the intelligence of those running the the Telegraph Wine Club.

    Having re-read my comments I think they remain fair, measured and responsible and I am happy to stand by them.

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  3. The comments made by you Jim are totally fair. The high handed arrogant response from anon only goes to show that they believe they can print whatever they like. The veiled threat is pretty disgusting. They should print a retraction and apologize for misleading readers. In my view I was mislead and if required would say that under oath in court.

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  4. The comments that Jancis and yourself make are misleading to investors! I know for a fact that you can 'reserve' 2009 allocations with certain companies who have allocations just as Bordeaux index, berry and others do. They offer you the chance to reserve but say you can not complete the sale until the release. One of the companies is on your recommended list. What you don't make clear is that Jancis and others who are traditional wine lovers, disagree with the whole investment motto and would pick up on anything to dis-credit it.

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  5. Anon. Neither Jancis or I have objected to being asked to submit wish lists. Our objection is to companies asking for payment now plus the question whether some very recently formed companies have a realistic chance of obtaining an allocation of the most sought after 'investment' wines.

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  6. 'disagree with the whole investment motto and would pick up on anything to dis-credit it.'

    There are unfortunately too many wine investment companies whose methods discredit the sector.

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  7. 'are you really saying that you don't hate the wine investment industry. You used to say that it made no money and examples of performance were rare and not regular. It seems you are back tracking to make yourself seem more moderate.'

    This is an edited version of a comment received from anon, who I fear is mistaken. I do not hate the wine investment industry, although I think that wine and particularly its prices can be distorted by wine investment.

    There was a considerable period following the Asian crash in 1997 when the increase in fine wine prices hardly kept pace with Cash ISA's. That changed around 2005 and particularly when the en primeur prices for 2005 came out in 2006.

    What I dislike are the number of companies seeking to gull investors – sometimes out of all of their life savings. Remember that since 1998 some 20 companies have been closed by the High Court in the public interest.

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  8. wish-i-could-afford-lafite23 April 2010 09:29

    Jim,

    This is turning into an interesting thread to which I would like to contribute. A high proportion of those companies were closed in or around the time that you launched your original investdrinks site, and quite probalby as a consequence of it.

    Your claim that you don't hate the wine investment industry is in stark contrast to the hard line you took back then. I would suggest to you that this new more moderate position has been forced on you by the economic realities of the booming wine investment market (1000% for Lafite 82 in the last decade I read somewhere recently), but it somehow doesn't ring true.

    Not all of these companies closed charged the ultra-high prices of, say, City Vintners. With the luxury of hindsight are we now to believe that the men and women who ran these companies were not rogues afterall, but rather entrepreneurs with far greater vision than you, the wine press of the time and the DTI?

    Certainly from a wine investor's perspective mistakes were made. Perhaps it is high time that an independant ombudsman looks into the actions of the DTI and how much infuence they take from sites such as yours to ensure tha the same mistakes aren't made again. Perhaps it is also time that either the DTI of the FSA issue some guidleines to assist the owners of these businesses to operate them in a structured, transparent environment.

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  9. Thank you for your comment unaffordable Lafite – a pity you prefer to be anon but so it goes!

    I will reply in my detail to your comments shortly but I would like to draw your attention to the opening section of www.investdrinks.org written in 2000 and subsequently amended:

    'It is possible to make money through investing in certain top wines, especially from Bordeaux. However, it is certainly not as easy as it is often suggested.

    Historically price increases in fine wine have tended to go in steps: a short period when prices rise quickly followed by a longer plateau when prices remain essentially static and even decline a little.

    This was certainly the case in the late 1990s until around the end of 2005. As investdrinks recorded:'

    I hope I have always taken a hard line against companies that either offered poor value wine investments or who sort to mislead investors. I make no apology for this.

    (Will post more on this shortly.)

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  10. Jim. You have taken great pleasure in trying to ruin perfectly viable businesses. I am a solicitor and friend of one of the companies you chose to bully for a while. You actually made no direct complaints except that you felt there might possibly bee something untoward. By assocation, these people have lost money and time, and great stress added to their lives. You make reference to the fact that you have tried to get police to look at new companies in order to have them closed down and I agree with the previous writer that your site is being vindictive as well as helpful. Why as an example did you pick on companies like Cult Wines when they are members of liv-ex, very well known clients of LCB with a massive stock list, and have wine experts who work there, not too mention trade references from some of the top companies in the industry. Heresay and discussion on products they offer on your site, creates bad press by assocation. I remember reading Tom Gearing's blog response to you and really though that it seemed fair and professional, on the other hand you did seem a bit of a crusader!

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  11. Thank you for your comment anon.

    'Jim. You have taken great pleasure in trying to ruin perfectly viable businesses. I am a solicitor and friend of one of the companies you chose to bully for a while. You actually made no direct complaints except that you felt there might possibly bee something untoward.'

    Entirely untrue – I have not set out ruin a business. I commented on a press release sent out by Cult Wines Ltd

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  12. This comment has been removed by the author.

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  13. Anyone who actually has spent any time with, or talking to Jim Budd will know that his intentions are completely honest. Any company accused of wrongdoing can very easily issue proceedings against Jim. He puts his name to everything he does. The UK courts have a fair and simple system for clearing a companies name. If they would prefer to avoid the cost then a company accused by Jim of wrongdoing should invite Jim to visit their premises, by opening their books and records to scrutiny a company can surely demonstrate that their business practice is legitimate, if it in fact is.

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  14. wish-i-could-afford-lafite25 April 2010 21:34

    Hi there Jim's anonymous friend - interesting post. I don't think anyone's questioning whether Jim's heart is in the right place, nor his remarkable commitment to his cause. However, Im sure I'm not the only long term reader of his scribings who's questioning whether he could EVER admit he was wrong about something, whatever evidence were thrown at him. In light of the astonishing price increases of wine over the last decade it is now a matter of fact that investors would have done better to listen to the advice of many of the firms closed by the DTI than his own advice.

    And in this respect I am sorely dissapointed that my previous question mark over the entrepreneurialship of the owners of these businesses was so readily dismissed, particullarly when it was linked to the greater question as to whether the intervention of the DTI was right in all cases.

    If an entrepreneur is a person who sees an opportunity in a given marketplace and capitalises on it commecially then these guys deserve the moniker as much as anyone. Let's face it, in the end these men and women were proved to be right so it is no longer acceptable to simply say "of course they were doing wrong - the DTI shut them down". We need to reflect on what happened, learn from it and adopt a more considered approach - for both future investors and the business owners.

    In fact, these guys were so accurate in their predictions that it is difficult in retrospect to criticise many of them at all. Sure, Jim's correct that they didn't invent wine investment, but they began promoting wine in a new ways to a brand new audience, and in such timely fashion that with the beneift of hindsight I for one am humbled.

    The trouble is, the powerful message carried on Jim's site at the time saught to convince their customers time and time again that they they had been duped by unscrupulous conmen into buying investments with little or no potential. The complaints line at the DTI must have been jammed night and day. It is no suprise that the DTI went to war on these firms, yet at this time none of us had any incling of the remarkable decade wine investment was about to enjoy.

    If we all knew then what we know know would the DTI have acted the same way in all cases? How much influence did they take from investdrinks? I hope these question aren't so easily dismissed.

    And yet I am not so foolish as to suggest that all is well in the world of wine investment. The directors of Nouveau World Wines are facing porridge and Mr Shakeshaft of Vin-X, sited above, appears to have neatly side stepped into conveniently-unregulated-wine having been fined a rude amount by the FSA for naughtiness in his stockbroking firm Wills & Co. Mr Budd's site has a place for sure, but I hope people using as part of their due dilligence process see it for what it is - one voice.

    (I ran out of characters but if you'll all forgive me will continue in a second post - got some important stuff to say!!)

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  15. wish-i-could-afford-lafite25 April 2010 21:35

    Cnntinued (sorry to be so verbose but this stuff really needs saying)....


    Wine investment companies are a real and important part of today's wine industry - not the parasitic, unwelcome leftfield inconveniences of Mr Budd's assertions - and in light of current economics this is only set to escalate. They have every bit as much right to operate in the wine trade as the 'establishment'.

    What we need, obviously, is some form of regulation - on public promotions at the very least. I suspect that the owners of these firms would find your suggestion to make themselves acountable to Mr Budd laughable, but I'm sure they would accept being accountable to somebody.

    I have some questions for the DTI - how on earth can you close 22 frims in a specialist marketplace yet not see fit to issue any guidelines whatsoever for current or future business, guidleines that could help protect customers and stop firms falling foul of you requirements? Your actions are supposed to be in the public interest, right? Surely prevention is better than cure here? It must cost you a heck of a lot of money (our taxes!) to investigate these firms. Why not try and work with them a bit more? I simply don't get it, I really don't.

    Could it be that, in doing so now, the DTI would lay themselves open to compensation cases from previously closed firms? Or perhaps the DTI are similarly shy of admitting fault to Mr Budd (although Mr Budd I applaud you for having the courage and decency to change the format of your reporting to a blog thus giving us all a chance to add our ten cents worth).

    Perhaps if the DTI are too shy to act and the FSA can't be bothered then the invesment wine companies should get together and form a professional body with a universal code of conduct. It would be a start at least...

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  16. Thank you for your further comments unaffordable Lafite.

    You say:

    'yet at this time none of us had any inkling of the remarkable decade wine investment was about to enjoy.'

    As you say...

    You make a number of good points about regulation and ideally it would be the FSA who took this on as they do for wine funds since they are collective investments.

    I'm afraid you have a lively imagination – I certainly don't recall calling wine investment as 'parasitic', although that would doubtless fit dubious wine companies.

    Of course my view is 'one opinion'. If investdrinks does anything then I hope it pints people to where they can find information enabling them to judge whether the 'investment' offers companies make are a good deal or not. It is here that wine-searcher plays a crucial role. I have always used wine-searcher widely as an indicator of price.

    I would hope rather than people just accepting my advice that they checked this and came to their own conclusion. Just like the High Court did on the petitions from the DTI.

    Even on the excessive mark ups levied by Goldman Williams and City Vintners people eventually made a profit but their profits would have been more substantial had they bought from merchants who sold at a more reasonable price. My advice to GW and CV investors was to hold onto their wines, if they could afford to do so.

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  17. Jim, can I suggest you start a new thread about the merits of regulation? Some great stuff here but buried at the bottom of a non-relevant thread so will only be viewed by the very committed. This is the sort of discussion that rises above the usual tit-for-tat found on blogs and could be the catalyst for real change in the wine industry.

    I have a very personal story. I first bought wine from a lovely girl called Georgina (surname long forgotten) at Bordelais & Dutch. Upon subsuequently discovering your site I concluded that I had been a gullible fool and sold the lot to Far Vintners (at a small loss once they took their slice) only to then watch the wines quadruple in value. Twice the fool me, but I am now back in the wine market and doing very well thank you.

    It is a shame that my initiation was such a baptism of fire and clearly some form of govenrment advice or regulation would have been very helpful to me.

    And I therefore second Mr No-Lafite's questions to the DTI. But careful there Mr No-Lafite...You speak well for yourself but you're treading a very thin line to hypocrisy. You appear to think it's ok to pass judgement on a couple of yet un-tried companies, but having stated your argument you have no right to do this, however bad they look on paper. Get this wrong once and it will be you eating humble pie.

    And this is the trouble with us mere mortals passing judgement in public arenas. We are all only privee to the same (often prejudiced) guff in the public domaine and have no real insight to the morals or intentions of these firms. This is why we need regulation.

    So come on Mr Brown's successor (!), let's see some action. It's the wild west out there - the baddies keep turning out to be goodies, goodies to be baddies, and even your sherriffs are a law unto themselves. Let's have some simple controls to protect us all and leave us in peace to make informed, calculated decisions.

    Oh, and whilst we're on the subject of humble pie (if I may use this site for such self serving purposes) - I am very sorry Georgina for the way I spoke to you. I hope you bounced back from those troubles and are reading this from a hammock in the bahamas. GF

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  18. Who ever consulted London City Bond with regard Vin-x, the account was set up in the name - Vinex. Therefore it did not appear, hence why it looks like no account.

    This had now been rectified.

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  19. I contacted London City Bond to check if Vin-X had an account. I now understand from Vin-X that they have sub-accounts with other wine merchants but as of today they do not have their own company account.

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  20. Anon. I will start new thread on regulation soon. However, I have one or two posts about wine portfolio offers before then.

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  21. Jim, a quick point about the issue of reputation by association. In the case of some of the wine companies who do a very good and fair job; "listed on wine-searcher, liv-ex members, good track record and experts in house", it is not fair for them to be listed on your site over things like press releases or accusations (cult wines ltd). The reasons why I think this, is because by association of being on your site, clients will think there is something seriously wrong and leave causing loss of business. I know this to be fact in concern of the specific business. I work for a leading firm and I am a friend/client of said company, I did advise on this but as you know re-publishing is a loophole for Google not to remove material. Please print this in whole as I think it is a fair comment and earlier ones have been edited or not put up!

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  22. Message from anon received 29th April 2010 – amended.

    I used to work for a few of these wine brokerages and certainly i think something has been achieved by this site. It has forced a lot of them to be more price friendly and certainly more transparent.

    Mr Lafite is right in saying that Jim's blog site gives the readers a chance to voice their opinions and not simply be swayed by the one sided opinion of someone clearly not in favour of making money from wine. However you put it Jim your site was dedicated to turning people away from wine investment, period.

    A good number of the companies you have named and shamed certainly deserved to be closed and i am with you 100 percent but in my humble opinion some have been unduly called into question.

    It is clear now from reading your readers comments that not all are unhappy to deal with some of these companies, in fact, to the contrary some are more than happy to continue because of the close personal service provided. This is certainly not given by a lot of the larger merchants more reputable companies you speak of.*

    Now i say because you bring clearly questionable companies like these to the attention of the public your site is worthwhile and needed until the FSA pull out their finger and start regulating these companies in one way or another.

    (* This assumes that the messages of support from apparently satisfied clients are genuine, which may or may not be the case.)

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  23. 'However you put it Jim your site was dedicated to turning people away from wine investment, period.'

    Anon. You are, of course, entitled to your mistaken view of the purpose of investdrinks.org.

    When investdrinks was launched in 2000 it was in the middle of the period from 1997 (following the Asian crash) and around 2005/2006 when fine wine prices were fairly static – they were on a plateau. During that time plain cash ISAs offered a better return.

    It is true that I think wine is ideally made to be drunk and hopefully enjoyed rather than being a financial instrument.I think you will find that is also the view of Robert Parker. I'm delighted that the Loire wines and thse from other regions of France are not considered suitable vehicles for investment.

    Since 2006 and the release of the 2005s Bordeaux en primeur prices of the top wines have shot up and clearly ISA at the current interest rates do not offer anything like a comparable return.

    Whether the current rate of increase in the price of the top wines can be sustained is another matter. Historically a sign of prices having reached their peak is when everyone is piling into the market. We will see!

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  24. Dear Sir.
    Thank you for your web-page with all your comments. I have just received some wright-ups regarding wine investing from "Vin-x" following a "blind" call last week. I know the answer I will give them when they give me a follow-up call this week! Many thanks for your notes.
    Yours sincerely,
    Ron. Williams
    Finchley.
    lobworm@googlemail.com.

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  25. caveat, I work for vin-x.

    Just wanted to defend ourselves a little, we are for real, we have accounts at vinoteque, we offer good prices to our clients and as regards the FSA stuff, well there are two sides to every story, if you'd like to hear ours i'm happy to give it to you in detail here later

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  26. An edited version of my comment from 24th April 2010.

    Although investdrinks may have played a part in bringing a number of dubious investment companies to the attention of the authorities, if you seriously think the High Court would close around 20 companies in the public interest on the say-so of a journalist it is time as Gordon Brown said Thursday night ‘to get real’! The High Court closed down in the companies on the merit of the cases brought by the DTI.

    ‘With the luxury of hindsight are we now to believe that the men and women who ran these companies were not rogues after all, but rather entrepreneurs with far greater vision than you, the wine press of the time and the DTI?’

    I’m not sure what claims to entrepreneurship those running the companies closed by the High Court can make. They hardly invented wine investment, although it is true that some of the leading figures showed great energy in establishing and developing their companies – pity this wasn’t used to better purpose!

    The problem is very few of the companies can be competitive as they add an extra link in the chain if they are buying from merchants/brokers such as Farr, Bordeaux Index etc. There is currently a rash of ‘woodchip’ wine investment companies, very recently established jumping on the wine investment bandwagon. A number have little or new clue about the fine wine trade. A number make very unlikely claims about expertise and how they are leading fine wine brokers.


    I would certainly welcome some involvement by the FSA in regulating wine investment companies.
    24 April 2010 09:42

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  27. Seems to me the wine market is a bit of a monopoly. If the big eight firms dont sell to other new aspiring comapnies at prices that allow them to be competitive then I believe that there is where the problem really lies. Also I find your views on upfront fees Mr Budd very disturbing. How does a company pay for its staff, bills etc with out any kind of mark up to their product? By getting paid 3 years down the line at the end of the term of the investment? I know when I rang Berry and Rudd they said they offer the wine with no vat or duty to pay of course and charge nothing upfront or indeed at the end of the term of the investment either? Does this seem transparent to you?

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  28. Anon. I have never said that a company can't make a profit. However, if you know that your prices are substantially higher than the compeition you shouldn't be touting your services in wine investment or you should be making potential customers aware that your prices are high and that the same wines can be bought more cheaply elsewhere.

    Furthermore buying the wine is often easier than selling it, so better to pay a commission on the sale rather than the purchase.

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