Wine fraud bilks British investors [BBC]

Wine investment fraud may run £30 million a year according to a source in a BBC investigative segment that aired last night. It’s interesting, though hardly surprising, to note the fraud story moving beyond simply counterfeit bottles.

The segment on wine fraud highlighted an investor group that lost 50,000 when the wines it purchased were never delivered. While it is tragic, it’s even more tragic that one of the bilked investors admitted that he couldn’t afford to lose the money. Perhaps he should have bought wines to drink, rather than ones for speculating on.

Simon Staples of BBR in London cites 400 percent returns on wine in 18 months. Jim Budd notes that he keeps a list of 60 merchants that he wouldn’t deal with and cited the £30 million a year figure. What do you think of that estimate–low or high?

Caveat emptor!

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15 Responses to “Wine fraud bilks British investors [BBC]”

  1. […] This post was mentioned on Twitter by Wine Lover +, Dr Vino and SlateWine, Ali. Ali said: RT @TopWineNews Wine fraud bilks British investors [BBC]: Wine investment fraud may run £30 million a year […]

  2. Hard to pity bubble speculators. Trading commodities is one thing, as this greases the wheels of the market so to speak. But these people are simply looking to take a cut of profit while the bubble is on the upswing. Just another variant of hedge fund betting. If you don’t want to work for your money, then losing is one possible result.

  3. The BBC is awfully slow off the mark on this; I’ve been reading about wine-investment scams of this and other kinds for the better part of a decade in Decanter and other publications.

  4. Any opinion on the amount of questionable wine that is donated to be auctioned for charitable causes? Seems to me that many wine speculators simply dump questionable bottles for the tax write off… Caveat emptor indeed!

  5. Way to go, Jarrod–you’ve hit on what the Beeb shopuld have been investigating, instead of the tired approach they did take. And must such dumping necessarily be limited to speculators?

  6. This simply reenforces the notion that any wine buyer should build an ongoing relationship with reputable professionals. Many times buyers are looking to find the best deal, which they believe to be the lowest price. However, there are more important considerations to be made like provenance and reputation. There are very bad merchants in this industry like any. Fortunately, there are also very good, highly reputable sources of fine wine. One can gamble with the lowest price entities, but that activity will always favor the dealer, just like Vegas.

  7. True enough Bill, that type of donation is absolutely not limited to speculators.

  8. Tom, I agree, but only up to a point. Yes, a real relationship with a trustworthy professional is a wonderful thing and a joy gorever, but a lot of grief would be avoided if people would focus on the idea of wine as a pleasure instead of something to make money off. Of course, if investing is your thing, then by all means go ahead, but please don’t expect the rest of the world to care if you lose your shirt.

  9. […] The  BBC’s “Inside Out” investigation team looks at the current boom in wine investment — and how it’s opening the door for “unscrupulous fraudsters.” (H/T Dr. Vino) […]

  10. Jarrod — do you have any evidence of that?

    Bill M — I’d venture to say that the viewership of BBC 1 is larger than the readership of Decanter. Also, there may have been more to the piece than this two minute clip.

  11. Dr V: all the more embarrassing, then, for the BBC, no? Gigantic TV organization with gigantic publicly funded budget and huge audience ‘uncovers’ a story several years after a tiny little print mag read by, comparatively speaking, hardly anybody. I’d expect better from such a co0lossus, but then I once expected better from the NYTimes.

  12. Dr. Vee, my only ‘evidence’ is personal experience. I’ve personally heard conversations between serious collectors (some of whom might be considered speculators…) regarding the disappointing/over the hill/poorly stored wines that they were planning on donating ‘for the write-off’. The insinuation was that they had themselves been taken advantage of (or had simply made a mistake) when buying a prestigious wine, and instead of making a stink or just ditching the crap in an alley, they would instead stay mum and take the write-off.

    I guess what I was after was an opinion from someone more familiar with the industry at large. Am I the only person who has heard of this type of thing? I haven’t heard it mentioned in any of the various article/posts/tv specials about wine fraud, and to me it seems like an interesting slant on the topic.

  13. I haven’t heard anything about wine donations, but the write-off opportunity is easily exploited on any number of occasions. In the late 1960s, a footwear mfr donated product to Chilean earthquake relief, taking a write-off for several hundred pairs of high-heel shoes. As gov. of Arkansas, Bill Clinton took a write-off of $3 a paid for his used skivvies.

  14. The charitable wine donation is an issue the US charities are very well aware of – as I noted after interviewing several in a major fraud story I did for Wine Enthusiast a few years ago.

    Wine fraud also cycles through the world of doctors on a regular basis, both Jim Budd and I have come across them.

    Jim Budd has been writing about scams for many years and is one of the best (if not the best) at tracking and (importantly) reading the legal files. A guy on tracks auction scams/frauds and sometimes works with (scams are uniquely US).

    Two reasons where there are few stories of this type:
    1. Wine experts are not investigative reporters
    2. Writing about fraud and naming names means having a serious legal team willing to watch your back.

    From my experience, there are few bloggers who fit that profile.

  15. […] Vino posted this week that wine investment fraud may run as high as £30 million a year, not that I know how much that is exactly in American money, […]


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