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Thursday, 13 May 2010

The London Wine Shop: a good investment but for whom?

I have news of a portfolio of wines being offered by the London Wine Shop Ltd to NM. This investor is being offered five cases: 2003 Lafite (£13650), 2006 Lafite (£7150), 2004 Latour (£4400), 2002 Mouton-Rothschild (£3800) and 2005 Mouton-Rothschild (£7550). This makes a total of £36,550.
Certainly a good deal for someone but this may be The London Wine Shop rather than NM. For if NM consulted wine-searcher today it would be clear that by shopping around they could strip a cool 38.27% from The London Wine Shop's proposal.

Here is how: 2003 Lafite (£9800 – L'Assemblage), 2006 Lafite (£5950 – Richard Kihl), 2004 Latour (£3159 Fine & Rare), 2002 Mouton-Rothschild (£2525 Justerini & Brooks) and 2005 Mouton-Rothschild (£5000 Woodland Wine). This makes a total of £26,434

I understand that NM was cold called by The London Wine Shop Ltd. Doubtless they would have explained to NM that because their prices are so high they were proposing a very long term investment. Furthermore should he choose to shop around he could save himself £10,116. I assume that The London Wine Shop Ltd would also have explained to NM that in order for the portfolio to start making money in the real market, his wines would have to increase by 53.63% to take into account commission on the sale. I'm assuming a low commission of 10%. Then, of course, there are storage charges, although given the prices of First Growths these days they won't make a significant difference to the sums. 

The London Wine Shop Ltd 
The company was founded on 4th August 2009 and its registered office and given trading address is Berkeley Square House, Berkeley Square, London W1J 6BD. investdrinks understands that their registered office is on the second floor. This is one of the serviced offices run by Regus. Sonny Soper is the company's director. The London Wine Shop Ltd is due to file its first accounts on 4th May 2011. The company appears not to have a website.    

Conclusion
The attractions of this deal for The London Wine Shop are fairly clear. If I was NM, however, I would find the attractions considerably less compelling. If Mr Sonny Soper would like to make the case for NM paying 38% more for his portfolio if it is bought through The London Wine Shop, I will be happy to post his explanation.

13 comments:

  1. Dear Budd

    The lafite 2003 are very fluid and continuing to rise, I feel it unjust that you are not taking price rises into account, All the major Vintners will tell you that prices of lafites are going up and change quite quickly.

    HOWEVER I AM SURE THE lONDON WINE SHOP ARE CHARGING EXORBITENT PRICES

    best regards

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  2. Anon. Thank you but I'm not entirely sure of the point you are making. I haven't suggested that the Lafite prices may well not rise due mainly to the demand for these wines in the Chinese market. The prices quoted are as yesterday – surely an entirely fair way to judge how compelling The London Wine Shop's offer is.

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  3. Actually, anon's got a point - I was recently offered some lafite 2004 at £5,900. When I checked on wine-searcher there were 4 or 5 co.s appearing to be cheaper, but when I phoned them none of them actually had stock (I see Justerini & Brooks are still quoting £5,200 today, but I phoned themover 2 weeks ago about this and they didn't have any then! Naughty.)

    The universal excuse was that the market was moving so fast that wine-searcher couldn't keep up.

    My advice to anyone checking prices on wine-searcher at the moment is to take the time to phone the co.s or visit their individual websites. Prices on wine-searcher are currently unreliable.

    Suggest you do that too jim - you might find you're inadvertantly printing out of date prices.

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  4. I agree the prices on wine-searcher may at times be indicative. Nor do I necessarily choose the lowest advertised price. Furthermore even if the price has risen, it is unlikely to have jumped by 38% overnight.

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  5. You sure Jim? The only co I can see currenlty listing stock on their website from the wine-searcher list is bordeaux index at £6,500, so 25% higher than Justerini. The price has only got to get to just over £7100 for 38%, which might well happen in a week or so in this market so Justerini need sharpen up thier act and update.

    Anyway, the point is that it's well worth double checking prices at the moment. Wine-searcher prices can be wildly below current offers.

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  6. PS - nothing in my comment was meant as a defence of London Wine Shop. Having checked their prices on the actual sites of other merchants I can see that their prices are still too stiff...

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  7. I will certainly bear in mind the price rises, although Lafite 2004 was not part of the proposed portfolio.

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  8. For some reason this is turning into a bicker. I was citing 04 Lafite as that was the wine specifically offered to me recently which led me to uncover the problem with wine-searcher. My comments were never intended as a defence of The London Wine Shop.

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  9. Anon. Many thanks for the clarification. Will bear your points in mind. Jim

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  10. Dear Jim London Wine shop is expensive 2003 lafite prices at farr are now £11500 a good price difference even at BWI prices are similar so you are correct in stating they are overpriced!!!!!

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  11. London Wine Shop sent me a brochure after a cold call and have recently offered a case of Chateau Lafite Rothschild 2006 for £9300. I said that the price looked expensive given the prices on wine searcher.com. Their response was that the prices on winesearcher were out of date and the wines listed may not even be available. What do you think about the price?

    Having seen £15100 go into a black hole with seale wines should I avoid any company that cold calls?

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  12. Anon:

    'Having seen £15100 go into a black hole with Seale wines should I avoid any company that cold calls?' Yes absolutely and equally don't buy from a company you know nothing about.

    wine-searcher is regularly updated and the people running wine-searcher do run checks to see if the wines listed are available. In any case you can also phone a company listing wines on wine-searcher to see if they are still available.

    I would not buy wine from the London Wine Shop. prices for a case 2006 Lafite currently range from £6700 considerably less than the London Wine Shop has quoted.

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  13. Jim, i use to work for the london wine shop, have only recently left and can say honestly, that yes they may cold call and yes sales people can be pushy but thats because they are selling a unvestment that is doing very very well, but they are a great company! i can understand you trying to root out companies that are scams and that are looking to fleece people for money! but when you have a good comes along and does everything they can to look after there clients! i dont understand why u would try and stop people investing when u no very little! (i left the company to start up my own business which has always been my dream) as for wine searcher, if u can get wines at there prices! well done ur onto a winner, i very much doubt u will get them tho!

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