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Saturday, 14 April 2012

Beaumont Vintners Ltd in liquidation – few assets

Marriott Hotel, Bexleyheath: venue for creditors' meeting

Beaumont Vintners Ltd duly went into liquidation on Thursday 5th April 2012. During a meeting held Marriott Hotel in Bexleyheath, Nedim Ailyan of Abbott Fielding and David Ingram of Grant Thornton have been appointed as joint liquidators. The deficiency is understood to be £1.5 million and there are few assets. The deficiency includes between £600,000-£700,000 of orders placed by clients Beaumont Vintners Ltd for Bordeaux en primeur believed to be 2009s. Beaumont placed orders for between £30,000-£40,000 of en primeurs and these I understand from Nedim Aliyan are currently thought to be the company's sole assets. 

Samuel Philips, the sole director, was present at the creditors' meeting. Philips was appointed on 10.11.2011 following the resignation of Stephen Carpenter _ appointed 8.10.2010. It was clear from the meeting that Philips was a nominal or patsy director as he was not a signatory to the company bank account. Apparently Carpenter had remained a signatory. A Richard Evans had also been a director of the company – appointed 28.6.2010 and resigning on 9.2.2011. investdrinks understands that during the meeting at the Philips declined to name those who actually ran the company, which was set up on 18.6.2010.         

Bordeaux UK Ltd – an update on the liquidation
It has still not been possible to establish final figures, partly because the company's system was so poor and inadequate. There is between £300,000 and £400,000 worth of stock at the Octavian bond in Wiltshire, where it appears that customers' stock was switched without their knowledge between named customer reserves and Bordeaux UK's own account. There is over £2 million worth of 2009 en primeur that the company bought. It is planned to sell this through Sothebys auction house, although the timing of the sale will be delicate if the liquidators are to realise the best price for this stock. It is hoped that this will raise between £2.5 million - £3 million.

Overall current claims from creditors are between £8-£10 million but the actual figure is understood to be around £6 million as a number of creditors have claimed what they think their wine ought to be worth rather than what they paid for it. Furthermore because the figures have yet to be finalised Revenue and Customs have not yet be able to submit their claim for unpaid tax.

As things stand creditors are likely to get 30p in the £. investdrinks understands that due to the lack of proper systems of control at Bordeaux UK, the same stock might be sold several times over to different customers.  

Bordeaux UK on the BBC   
The BBC will be featuring Bordeaux UK later today with Paul Lewis covering this story and problematic wine investment on BBC Breakfast and then later on Money Box (Radio 4) at midday. See BBC story by Bob Howard here.


Lessons to be learned
Nedim Ailyan of Abbott Fielding estimates that investors may have lost over £100 million over the last four years as more than 50 wine investment companies have 'collapsed'. 

Although Bordeaux UK Ltd bought substantially more wine than Beaumont Vintners Ltd it appears did Beaumont Vintners Ltd, customers of both companies are going to be substantially out of pocket and for some this will represent a substantial loss on their life savings and consequently a reduced standard of living for their retirement. This is long-term mugging.

Do not fall for cold calls and aggressive, high pressure telesales tactics

Check out companies carefully before buying. This is particularly important when buying en primeur. Chris Kissack has some good advice here on en primeur particularly related to the 2011 Bordeaux vintage with the campaign just beginning.

Use price checkers like wine-searcher to see whether you are paying over the odds.

Set up your own account at a bonded warehouse making sure that your wine is quite separate from the company. With a customer reserve account your wine remains under the control of the company and your wine can be moved or even sold without your knowledge. 

Spread your risk – do not put all your savings into wine. 

Wine investment, except for wine funds, are not regulated. So if things do go wrong there is no compensation scheme

See also the WSTA (Wine & Spirit Association) wine investment guide


  1. So Jim, why has the SFO not been called in, I mean it is a fraud is it not, what will happen???? does VanderHook get of free, or are the police going to get involved

  2. telesales sales people should all be licensed and pass exams in order to sell investment products similar to security guards who hold SIS cards. Ill never trust anyone on the phone again selling something having learnt my lesson the hard way!

  3. Anon. All good questions but I'm certainly not in a position to say whether the police will get involved or not – nor the SFO. It is, however, clear that some wine was bought but not enough to cover all the orders and customers' money they took.

    It would appear that Beaumont Vintners Ltd is a clearer case of fraudulent trading.

  4. PS Anon. As I'm sure you are aware in any criminal case the police and the CPS have to weigh up whether there is sufficient evidence to have a good chance of securing a conviction.

  5. JM. Thanks for your comment. I'd be grateful if you would email some supporting evidence to back up your clsims please

  6. Will the companies who happily supplied Beaumont Vintners with the wine be held accountable? It seems that perhaps with a little more self-awareness from the big UK fine wine merchants, companies like these would not even be able to buy the wine in the first place.

  7. Anon. A very fair question except that Beaumont appeared to buy very little wine

  8. Is it a fair question?

    If they had actually purchased wine from UK merchants and brokers and paid their bills on time, why should those merchants and brokers not sell to them?

    How they meant to know that at the end of it, someone is getting scammed? How can it possibly be their responsibility to check what their customers are doing with the wine once purchased?

    Computers are used in a huge amount of scams. Should PC World be vetting their customers to ensure they are only buying computers for legitimate uses?

  9. Anon. Yes it is a fair question. At the beginning of the last decade a group of around 30 merchants pledge not to supply known wine investment scam companies. However, the case of Beaumont would appear to be different as they weren't buying wine.

  10. You don't really answer my question there Jim.

    Just because a few years ago some merchants decided not to supply people they thought were dodgy does not make it their job to vet their trade customers as to their end intentions.

    As an example, lets say, the long-standing merchant X Vintners sells Y Investments (a newly set-up wine investment company) 10 cases of 2010 Lafite, and Y Investments pay on time and take delivery of the wine.

    However, Y investments have actually sold 100 cases of 2010 Lafite at an inflated price and have no intention of buying everything they have sold.

    How then is X Vintners meant to ascertain what their customer intends to do with the wine? How can it possibly be their responsibility to check that Y Investments are legit?

    And who decides what is 'dodgy'? You? What if Y Investments have every intention of supplying the wine and purchase everything they sold, but have sold it all at an inflated price?

    Is that dodgy? There is plenty of information on price for people who do their homework

    I can buy a book at Waterstones for £30 or on
    Amazon for £15. Does it make Waterstones dodgy for selling it at an inflated price?

  11. In reply to the other 'anon':

    I think any company pertaining to be an investment firm with 'expertise' selling at inflated prices don't have their customer's interest at hearts.

    And in your example, if Waterstones were actively selling their £30 book as an investment and telling customers it was a must-buy then yes it would be dodgy.

    I find it strange that people actually try and argue the case for companies that sell wine for hugely inflated prices.

    Regarding more self-regulation from the major UK merchants, I believe Liv-ex use a quick and simple vetting service before accepting any new members. Perhaps this could be applied industry-wide?

    The fine wine market and specifically the investment side of the market has really been tainted in the last couple of years by these companies. I think it's actually in the interest of the big merchants to play a more active role before it starts to affect them negatively too.

  12. Anon: 'I can buy a book at Waterstones for £30 or on
    Amazon for £15. Does it make Waterstones dodgy for selling it at an inflated price?'

    Retail is not the same as investment, particularly if you are telling people that they will make money when you know what you are selling is way over-priced - the point that the most recent anon makes clear.

    You could equally try to argue that the banks have no responsibility in relation to money laundering – one of the charges the five are facing.

    I think it is clearly in the interest of the bonded warehouses to check out companies before allowing them to open an account. The bust of companies such as Bordeaux UK and Beaumont Vinters, only brings them a large amount of unpaid grief.

  13. In reply to 'Anonymous Apr 18, 2012 03:47 AM'

    For the record, this is my first comment on this thread.

    Yes, it is a fair question and some of the 'reputable merchants' seem to agree. Take Justerini & Brooks, who have a selective vetting system in place for trade clients who wish to order through them (a 7-page form I believe). It is the right way to operate, it ensures that you are seen to be undertaking due diligence in order to not supply any of the 'Claret Web' mobsters, helping to deter them from operating.

    Having recently dealt with a private investor who came to me seeking help having been a victim of one of the recently featured scam companies, I was dismayed to learn that the few cases of wine that were purchased (they only ever bought less than 10% of their total orders from customers) were supplied from one of the largest London merchants. The scammers were using their 'relationship' with this high profile firm as part of the selling process to back up their reputability - so the argument could be that it is not in the merchant's interest to be associated with these bandits, risking their own reputation!

    "I can buy a book at Waterstones for £30 or on Amazon for £15. Does it make Waterstones dodgy for selling it at an inflated price?" - comparing online retail to high street retail? then drawing similarities to wine retail? really?? how very naive.

    which company did you say you worked for??

  14. My work has nothing to do with wine, but that is beside the point

    My comparison was crude but the point is germane. Caveat Emptor applies as much to buying wine as it does to buying books, whether retail or online.

    If you would like a more exact example, I note from Winesearcher that I can buy Lafite 2009 from one of Jim's trusted companies and one quoted above as an example of good practice for £13,150 per case. Yet I can buy the same wine from FRW for £10,282. Are the first company therefore dodgy?

    My point is what makes a company 'dodgy'? In the absence of a regulator, who decides? Jim Budd? A coalition of established wine merchants whose interest is to keep competition down?

    Quite clearly, I am not arguing in support of all the scam artists out there. I find it sad that so many seem to get away with it. In my posts I am clearly discussing those companies that buy wine to match orders but overcharge, or add large management fees, etc, etc

    I have massive amounts of sympathy in cases where people have paid for wine which are never bought and no do not exist, but very little for people who have paid over the odds for their wine. There is no excuse, with the amount of information currently available, for people not doing their research into what they are buying or investing in.

  15. Anon – please note that I don't list 'trusted companies' but companies I would consider buying from. Please note the distinction between retail and investment.

    I agree much more due diligence should be done but a significant proportion of those targeted are elderly.

  16. My apologies Jim. I retract the 'trusted' part

    But my point remains. Whether customers are elderly or not, the price differences are there. I am not sure that even the most established, reputable wine merchant would say to an elderly person who called to buy a case of Lafite that they could buy it down the road for £3k cheaper. Kudos to them if they do, but I would guess it rarely happens

    I'm not sure what distinction you're bringing my attention to either - I would be immensely surprised if any but a couple of the companies on the list that you "would buy investment grade wine from" had not sold a case of wine by calling it a good investment, whether or not it was available cheaper elsewhere.

    Does that make them dodgy? I really don't think so

    So perhaps the only difference is that some of the people you refer to cold-call. I don't agree with it but its not illegal