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Wednesday, 20 February 2013

Wine Investment Association: why I can no longer support this initiative

WIA – not currently fit for purpose or deserving investors' support

I was aksed today my view on the recently launched WIA and its Code of Practice.  

The WIA and its ‘Code of Practice’ purportedly aims to satisfy a public demand for 'higher professional standards in the promotion of fine wine as an investment asset class..' Unfortunately it does nothing of the kind.

I am very disappointed that the WIA  have decided to permit cold calling despite the clear view of the FSA (Financial Services Authority). Equally I'm disappointed that National Fraud Intelligence Bureau is apparently prepared to offer support to the WIA that allows cold calling for investment purposes. See news story in Harpers (8.2.2013). This is especially surprising as a search on cold calls the National Fraud Intelligence Bureau website – produces 16 entries. Here to give a flavour are the first two:

‘Cold calling and high pressure sale tactics were put into play to target and then bully people into buying into their scheme. ‘

Share sale and investment fraud

Share sale, boiler room, hedge fund or bond fraud involves bogus stockbrokers, usually based overseas, cold calling people to pressure them into buying shares that promise high returns. In reality, the shares are either worthless or non-existent.

You are usually contacted out of the blue by a professional-sounding stockbroker who offers you investment opportunities that seem too good to be true. You are also promised free research reports, special discounts and ‘secret’ stock tips.

In reality, the fraudsters are cold calling as many people as possible, persuading them to invest in shares that are either non-existent, or so worthless they are impossible to sell.

It is interesting and very revealing to compare the FSA's definition of acceptable cold calling with that adopted by the WIA:

'FSA: One-minute guide - Cold calling

Cold calling can expose consumers to high-pressure sales tactics which mean they can end up with an inappropriate or over-expensive product or service.
Our investment and mortgage financial promotion rules therefore ban cold calling (which is called unsolicited real-time promotions in our Handbook and legislation) unless certain conditions are met.

How do we define cold calling?
Cold calling is where a financial promotion is made during any dealings with a customer, which the customer did not begin.

However customers can be approached if they expressly request it. Failing to tick a box to say that they do not want to be contacted, or relying on standard terms that you may contact them again is not sufficient to allow you to cold call a customer.
What are the specific rules for investment business?
Investment rules allow for three scenarios where cold calls could be made:

the promotion is to an existing customer who anticipates receiving a cold call;

(The other two scenarios are not relevant here.)'

WIA definition of cold calling:
'The Association defines a cold-contact as a telephone call (or other communication) made to a private individual where there has been no previous communication with that individual, and where the individual has not provided his telephone number and/or given prior permission for the telephone call.'

Significantly different! The WIA's definition is a charter to pester people who have expressed no interest whatsoever in wine investment with the elderly and vulnerable being protected as the calls will be recorded!! 

The WIA claims in its ‘Aims of The Association’: 

‘1. To seek to safeguard the general public against fraud, malpractice and misrepresentation.5. To encourage high ethical standards of competitive practice amongst wine investment businesses.

6. To do such things as are necessary or expedient to sustain or raise the status of wine investment and the Members of the Association.’

If the WIA were serious about these three laudable aims they would have banned cold calling as they were urged to do so during their consultation period. Cold calling for investment purposes is both malpractice and is per se a high-pressure sales tactic. The companies who have signed up to the WIA have chosen to ignore the clear guidance given by the FSA for their own narrow commercial advantage. Claims of 'Higher professional standards' are pure window dressing. 

Although I have previously welcomed the initiative in principle, I will not support an association that ‘purports’ to protect the public yet allows its members to cold call. In my experience, shared by the FSA, the vast majority of investors who have been scammed or persuaded to buy unsuitable or overpriced wine investments have been lured by an initial cold call

Until the WIA comes into line with the FSA on cold calling I cannot support this initiative. I see no reason why the public should have any confidence in the WIA as it currently stands.

I am, however, in favour of a self-regulatory body for wine investment if it can provide confidence to the public that it is safe to invest with a member of WIA as well as providing protection for legitimate companies offering wine investment. Unfortunately the WIA is currently a wasted opportunity. 

Two articles on Cold Calling:
Jancis Robinson MW:  Cold Calling – a serious warning 

Tom Lewis: The Cambridge Wine Blogger: Cold Calling and the Data Protection Act 1998


  1. Hi Jim, I notice you still have them on your useful sites though - can't be that bad then

    1. Anon. Thank you for reminding me. The WIA site is no longer listed.

  2. Strange how silent the Wine Investment Association are being in the face of this criticism. You'd think they would at least try to defend themselves. But there again, how can you defend the indefensible?

  3. A shame Jim.

    This is clearly a positive move for the market, perhaps not as positive as one might want but clearly an improvement in the status quo, is that not per se a good thing?

  4. Thanks anon. I agree it is a shame, It is a shame that the WIA has not recognised that banning cold calling is absolutely fundamental. Why set up an association and not follow the FSA's rules on cold calling?

    Allowing cold calling under the terms permitted by the WIA is not a positive thing for the market. There may be some good things in the code but it is like saying that a car's seats are comfortable when the engine is duff and doesn't work.

  5. This comment has been removed by a blog administrator.

  6. Boo, Jim Budd, boo shame. This is nothing more than an attempt at sabotage. Someone on your turf?

  7. Anon. I welcomed the initiative when it was first launched in the hope that the draft code would be amended to ban cold calling. The WIA should be following the FSA guidance on cold calls.

  8. What a stupid comment - someone from the laughably titled "Wine Investment Association" by any chance?

  9. But why be so hostile? You're fighting the same fight. Your conbined voices are surely louder, even if if you have differences of opinion on the detail.

    1. Sorry I thought I had already replied but must have failed to post it!

      There are details and details – cold calling is fundamental. I had hoped that the WIA would nake a clear statement on cold calling by requiring its members not to cold call. In this way is would be clear that anyone receiving a cold call offering wine investment was not a member of the WIA.

  10. Amended comment by anon:

    Dear Jim

    all may be irrelevant anyway with the demise of the FSA and the introduction of the FCA, who may change their modus operandi making things a lot tougher

    The WIA is nothing more than a bunch of windbags run by the biggest hot air of them all, not to say they have absolutely no legal ability to enforce anything anyway.

  11. Hi Jim, may I point out that while the cold calling is something that any regulatory body has to get rid of if they are going to be credible, also the issue of how its members price the wines they are selling - and the commissions they charge - also have to be addressed. The Wine Investment say that they are not going to stipulate how much members charge - so does that mean that a company overcharging - like Goldman Williams, Bordelais @ Dutch etc, who were all shut down for massively overcharging their clients - would qualify for membership?

    It seems to me that any company who can pass an audit - and the companies mentioned certainly would have done as they were rolling in it - can join this "association" In other words a boiler room, overcharging outfit would be able to be a member of the Wine Investment Association.

  12. Anon. A very good question: so does that mean that a company overcharging - like Goldman Williams, Bordelais @ Dutch etc, who were all shut down for massively overcharging their clients - would qualify for membership?

    Although it would be more difficult to prove one of the grounds for convicting several of the fraudsters involved in the barrels of whisky and Champagne for the millennium scams was that theses already dubious investments were knowingly over-priced.

    Equally companies like Goldman Williams etc were closed in the public interest in part because of over-charging.

    I fear that the WIA may be more attractive to boiler room operations, who do buy the wine ordered by its clients, than companies who charge a fair price and do not cold call.

  13. Jim, You have stated above that you wouldn't consider buying wine from any company signed up to the Wine Investment Association under its current code - yet you only have one member (Vin-X) on your list of companies from whom you wouldn't buy wine. Culver Street, Provenance Fine Wines and Albany Portfolio Management are conspicuous by their absence. Why is this?

    1. I haven't received complaints about these companies nor as far as I know do they cold call, which I know appears a little strange as the WIA permits cold calls. This is why I haven't added them to the list.

    2. Hi Jim, so why don't you ask them all to publicly declare if they cold call or not. Those that declare that they don't, leave off the list, those who either declare that they do or refuse to answer, put on the list?

    3. That is effectively what I have done.

  14. The Wine Investment Association also warn in their code against the public doing business with companies who post their accounts late. Strange then that Albany Portfolio Management currently have a Proposal To Strike Off on companies house for being overdue on their accounts.See link below.

  15. Re my previous post (as yet unpublished by yourself) this next from

    Company Name:

    Company No:06817017
    Registered Office:
    Incorporated:12/02/2009 66 THE LANE
    CB22 5HP
    Company Type:Private Limited Company
    Company Status:Active - Proposal to Strike off
    Latest Accounts to:28/02/2011
    Latest Return to:12/02/2012

    As this seems to be an extremely serious position for a company that has recently gained a lot of positive publicity from being a founder member of the so-called "Wine Investment Association" your public opinion of this would be welcomed by many investors.

  16. Anon. Thanks for bringing this to my attention. Clearly companies should file their annual returns and accounts on time.

    It looks from Companies House that the proposal to strike off may just have been issued as there does not appear to have been a First Gazette published.

  17. The request was made today and the notice is due to go into the Gazette next Tuesday.

  18. Albany Portfolio Management Ltd: I understand that the accounts have now been filed.

    1. 28.2.2013: Companies House records now showing that the overdue accounts have been filed and that the proposal to strike off is no longer shown.

      Marcus Edwards, a director of Albany Vintners, resigned as a director of Albany Portfolio Management Ltd on 27th February 2013.

  19. Clearly every company currently involved in the Wine Association cold call, otherwise they would post here that they don't. None of them will do this as they actually all do cold call, and if they state publicly on this blog that they don't, sooner or later they would be found out. So come on, if all of you in the Wine Investment Association are not guilty of cold calling, state so publicly here on this blog!

  20. So there's your answer, Jim - not one of the four companies that make up the Wine Investment Association - Culver Street, Albany Portfolio Management, Vin-x and Provenance Fine Wines -have declared here publicly that they don't cold call. There can be no reason for this other than the fact that they do cold call - time to put them on your list?

  21. Anon. Though I'm grateful for your assistance, I'll decide who I put and the list companies from whom I would not buy.

  22. This comment has been removed by a blog administrator.

    1. Anon – thanks for your comment. Transparency is rich coming from an anonymous poster....

      You are right The London Wine Exchange's last accounts up to 31st December 2012 (Companies House) are for a dormant company. Peter Shakeshaft is the sole director and the company was incorporated in December 2011.

    2. This comment has been removed by a blog administrator.

    3. This comment has been removed by the author.

  23. herer jim

    have a read of this and a change of subject

    1. Yes – a good piece from Tony Levene. Jim

  24. small article by Tony Hetherington on Vin Borderlaise

  25. Hi Mr Budd

    Surprise surprise my comment removed..Transparency and anonymity arent really the same thing are they..My comments were all fair i thought yet no where to be seen..My problem is that your quick to tar everyone with the same brush and although youll not downright accuse a NEW company of something you full well know that it will be looked that in that manner..The reason ill choose to stay anonymous is i dont want my company all over your website anymore than it is already..Were on your "DO NOT TOUCH" side of the big red line..FYI were far better value than the company i mentioned in my previous post, our clients have all there wine in all there OWN accounts and the rubbish youve fired out there about us couldnt be further from the truth..I recommend at least meeting with NEW companies before having them by the throat, one day youll get found out but i guess its to late to go down that route..Remember we have bills to pay and mouths to feed and were not all thieves..

  26. Anon. You were asked to justify your claim of a cold call. No response, so I deleted your comment.

  27. Stunning quest there. What happened after? Good luck!

    Also visit my webpage ... Recommended Site

  28. A comment from anon about the WIA and its membership for the thread on the Finbow trial where it is not relevant:

    Jim I have a genuine question about the Wine Investment Association (WIA). I believe it went live in February of this year and it is now June. I notice that the membership of Albany Portfolio Management, Provenance Fine Wines and Culver Street is still listed as "Pending", meaning that they have not yet completed their audits. This seems very strange. This organisation has been going for four months yet only one company is actually a member? My question is, are the three companies in question actively being audited, or have these companies, due to the negative press the WIA has attracted from the entire industry, simply decided not to spend the money to have the audit done? If so, this so called Association needs to be disbanded. Please could we have an official statement from someone at thw "WIA" clarifying the position of the organisation, and the companies involved in it?

    On a related note, Peter Shakeshaft of Vin-X has recently written an article for Money Maker Magazine in which he describes the Wine Investment Association as, "an independent body working alongside the National Fraud Intelligence Bureau". How on earth can he claim theat the WIA is independent? It is the opposite of independent, being made up of 4 wine investment companies, not an outside, impartial overseeeing body. The link to the article can be found here

    1. Anon. As you say the membership status of the three companies is listed as pending. This is probably a question to put to Hugo Rose MW, the chairman of the WIA.