Bordeaux Index issues warning over Chinese Bordeaux 2009 frauds
Press Release: London, 26th April 2010 – Top London wine merchants Bordeaux issue first warning of illicit trade in unreleased vintage.
The quality of the Bordeaux 2009 vintage currently has the world of fine wine in a state of high excitement, with many experts declaring it the ‘vintage of the century.’
However, top wine merchants Bordeaux Index (http://www.bordeauxindex.com) today issued a word of warning, revealing for the first time that private clients have already been persuaded to order and pay for 2009 Bordeaux wines that have not even been released yet – from rogue traders based in the Mainland.
Such is the quality of the 2009 Bordeaux, many seasoned fine wine buyers – and growing numbers of investors new to fine wine – are expected to buy the vintage ‘en primeur’ (whilst it is still in the barrel). This maximises the potential return on investment, which according to Bordeaux Index could be as much as 20 percent within one year.
The vast majority of en primeur Bordeaux 2009 is yet to be released, and no wines of any significant merit have yet hit the market. With this in mind, Bordeaux Index Sales Director Sam Gleave was very surprised to learn that trade in certain high-profile fine wines was already booming – despite those wines not yet being released.
“We’ve long had concerns that a vintage like the 2009 Bordeaux could result in fraudulent futures trading,” says Gleave. “We urge buyers interested in the 2009 Bordeaux to deal exclusively with reputable merchants ONLY. Anyone offering top 2009 Bordeaux today is a fraud.”
The quality of the Bordeaux 2009 vintage currently has the world of fine wine in a state of high excitement, with many experts declaring it the ‘vintage of the century.’
However, top wine merchants Bordeaux Index (http://www.bordeauxindex.com) today issued a word of warning, revealing for the first time that private clients have already been persuaded to order and pay for 2009 Bordeaux wines that have not even been released yet – from rogue traders based in the Mainland.
Such is the quality of the 2009 Bordeaux, many seasoned fine wine buyers – and growing numbers of investors new to fine wine – are expected to buy the vintage ‘en primeur’ (whilst it is still in the barrel). This maximises the potential return on investment, which according to Bordeaux Index could be as much as 20 percent within one year.
The vast majority of en primeur Bordeaux 2009 is yet to be released, and no wines of any significant merit have yet hit the market. With this in mind, Bordeaux Index Sales Director Sam Gleave was very surprised to learn that trade in certain high-profile fine wines was already booming – despite those wines not yet being released.
“We’ve long had concerns that a vintage like the 2009 Bordeaux could result in fraudulent futures trading,” says Gleave. “We urge buyers interested in the 2009 Bordeaux to deal exclusively with reputable merchants ONLY. Anyone offering top 2009 Bordeaux today is a fraud.”
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The wine most likely to be offered will be 2009 Lafite. I understand from Sam Gleave that just as in the UK people are in China are being offered 2009 Lafite well before the price has been released. The danger is that the companies doing this have no chance of securing any 2009 Lafite, will pocket the cash and will have disappeared by the time the 2009s are due to be delivered.
I cannot see the registered number by law this has to be displayed on the website and Brochure
ReplyDeleteAnon. The company registration is on the site under Contact us. However, it does not appear to state where the company is registered.
ReplyDeleteAmended message from anon on 29.4.2010
ReplyDelete‘Cult Wines are the only company in the UK offering en primeur wines even before they are released.
They claim to have been to Bordeaux for the tastings and secured allocations, is this true??’
If you look through the investdrinks blog you will see that Cult Wines Ltd (through their wineinvestment.org) are not the only company apparently offering 2009 Lafite before the château has released its price.
My understanding is that the 2009s offered by Cult Wines come from part of the allocation that Ditton Wines Ltd expect to be able to secure.
Their site carried reports on their visit to Bordeaux during the en primeur tastings – over 6000 merchants and journalists were in Bordeaux for these tastings. I have no idea whether Cult Wines Ltd have also been able to make advanced reservations with merchants in Bordeaux.
To reply to the deleted part of your comment: there is I think nothing legally wrong in offering 2009 Lafite before the price has been released provided that in due course clients get the wines they have ordered and that the offer is made on the firm expectation of being able to secure the wines ordered. Clients ought to be made aware of the speculative nature of this offer – châteaux yet to release prices etc.
It would be a very different matter if you were offering and charging for en primeur wines if you had no expectation of being able to secure the stock.This might well be viewed as fraudulent.
However, I do think it is highly regrettable that such offers are being made and payments accepted before the price has been released. Clients buying en primeur are already effectively being asked to make a two-year an interest free loan to a merchant. I don’t see why they should be asked to further extend the period of the loan. These offers also have the effect of further stoking up an over-heated market. I would hope that this sort of offer is not being sold using cold calls.
Selling wine as an investment is currently outside of the FSA's control. Wine, like stamps, art and other collectibles is considered a "good" and not a financial instrument. The FSA is however clear that the sale of any item for future delivery is an investment contract, either as a derivative or futures contract. The key is that when there is no Immediate physical delivery or collection of the underlying product the transaction is covered by the FSA. The sale of securities by unauthorised firms and individuals is a prosecutable offence. It is more than likely a guidance note will be available on their website in the coming weeks. Let's hope the sale of En-Primeur gets covered by the FSA before the main wines are released.
ReplyDelete