Bordeaux Advisory’s staggering prices

[Matthias R WHT]

This wine investment company is based in Luxembourg and sells its
portfolio wines for remarkably high prices and offers wines that
appear to have little investment potential. An investor (Mr A) with
Bordeaux Advisory recently sent details to me of their portfolio that
cost 89,500 euros (£60,966) when it was purchased in February 2006.
According to wine-searcher.com these wines can be bought for €8944.29
(£6388.78). Of course were this portfolio to be sold on the open
market it would realise considerably less after commission charges are
deducted.

Mr A’s portfolio of 18 different Bordeaux includes a case of Château
Leoville Las Cases 1992 charged at €6250. In June 2006 this was
available through Wilkinson Vintners for £536.50 - a difference in
price of £5713.50. Furthermore 1992 was probably the worst Bordeaux
vintage of the decade and its investment potential is very far from
obvious. Most of the portfolio consists of minor AC Bordeaux
properties, some Montagne St Emilion and several second wines of
classed growths - Sarget de Gruaud-Larose 1997 for instance. A case of
Château Canon 1996, the one wine that might accrue in value, cost
€3590 (£2564) when it could be bought for €558.98 (£339.27) from
Corney & Barrow in mid-June 2006 - a difference of €3031.02.

Bordeaux Advisory International SA, founded and apparently run by John
Taylor, is based in Luxembourg and is part of the Graniton SARL group.
Bordeaux Advisory was registered here on 4th July 1995 and its address
is 60 Grand Rue/Niveau 5 Lu1660, Luxembourg. Tel 00 352 2633 1930 and
email: in...@bordeauxadvisory.com. Making up its board of directors are
Seline Finance Ltd, a dormant UK company founded on 19th July 1996
with a registered office at 88A Tooley Street, London Bridge, London
SE1 2TF and Judith Dekker of 60 Boulevard Napoléon 1, L-2210
Luxembourg. Dekker was appointed on 20th October 2006 and is mandated
to continue until 2012.

The sole director of Seline Finance Ltd is South African Richard Glen
Frank Turner (DOB: 10.12.1939) of 28 Rue du Couvent, Howald, 1363
Grand Duchy of Luxembourg who was appointed on 15.8.2004. He is also a
director of Seline Management Ltd, also of 88A Tooley Street, which is
Seline Finance’s company secretary. Turner is also managing director
of Falcon Participations Holding sarl, which is also based at 60 Grand
Rue, Luxembourg.

A previous director of Seline Finance Ltd, Jan H. van Leuvenheim (DOB:
15.3.1937) who resigned from Seline Finance on 15th August 2004 is
managing director of the following companies that are also based at 60
Grand Rue and have Seline Finance Ltd as their director: Sandhurst
Financial Trust S.A, Ivory Invest S.A., Fire And Ice Investments Group
S.A., Fiscopar S.A, Mortirolo Participations S.A., Société Anonyme,
Models Unlimited S.A., Euro Flor Invest S.A., M Trust S.A.,
Interfinance For Development S.A., Felijo Holding S.A. and Falcon
Participations Holding. It is not known if any of these companies have
any connection or involvement in InvestNow2 (www.investnow2.com), also
part of the Graniton SARL Group, whose registered office is 60 Grand
Rue, Luxembourg. ’ Graniton was registered on 16th May 2001. Its two
accociés (partners) are Seline Finance Ltd and Seline Management Ltd.
The InvestNow2 claims a way of investing that brings ‘unprecedented
high return of 29,64% on average per year or more!

Bordeaux Advisory’s website (bordeauxadvisory.com) acknowledges in the
FAQ section that the wines they sell can be bought more cheaply
elsewhere. However, they explain that:

‘Is it possible to come across the same wine I bought through Bordeaux
Advisory sold at a lower retail price?

Yes. However, this is the old comparison of apples and pears. These
cases have travelled a very different route from the château. The wine
from the château intended for the shops does not have a specified
history. In other words, you can never be quite sure how this wine has
been handled as far as transportation (lorries, delivery vans,
trolleys) and storage (at the wholesaler's, in shops, whether or not
it was removed from the case) are concerned.

Wine that has been transferred directly from the château to a Humidity-
Controlled storage in order to remain there, will undoubtedly have
been treated appropriately. This wine is particularly suited to be
left stored for years for future enjoyment.

‘The same wine, but with a completely different history.’

Provenance is an important consideration. For instance at the auction
a few years ago of old vintages of Latour, including 1961, that came
direct from the property sold for a significant premium. However, this
does not explain the price difference between wines sold by Bordeaux
Advisory and those listed on wine-searcher.

The Bordeaux Advisory site carries a number of testimonials from
‘satisfied investors’. Before purchasing his portfolio Mr A was
encouraged to contact one of these investors - a Mr. B. van Dam. On
the site van Dam says: ‘Experience tells us which investments give the
best return. I have invested in wine via Bordeaux Advisory. And the
result? An average return of 30.46% per annum. You see, experience is
not the only thing I gained!’

Mr A telephoned van Dam. A told me that van Dam ‘claimed to have
invested 500,000 euro with BA and has had a yearly return of about 17%
minimum. He was so enthusiastic that he claims to have converted all
his capital to investments with BA. He said he was in his mid-forties
and had retired from all other work as the investment was paying off
so handsomely.’

Assuming that van Dam has bought similar wines at similar prices to Mr
A it would indeed be a remarkable achievement to make 17% a year. It
would, of course, be possible if Bordeaux Advisory were able to find
someone prepared to purchase wines at an amazingly inflated price.

Bordeaux Advisory’s contact in the UK is JWM Vintners Ltd, which is
based at Hadstock in Cambridgeshire and is run by 37-year old Jonnie
May. ‘Having spent most of my professional life in and around wine,
with the exception of a stint at a soft drinks manufacturer, I have
had the opportunity to experience all aspects of the trade:
harvesting, winemaking, and of course advising and selling to a broad
range of customers.‘ (jwmvintners.com). May founded JWM Vintners in
29th October 2001. May told investdrinks that he sells some wine to
Bordeaux Advisory and arranges storage for Bordeaux Advisory at London
City Bond. Update understands that BA clients’ stock is stored in the
JWM Vintners account. Interestingly JWM has sold Château Crabitey 2001
Graves, another wine in the Bordeaux Advisory portfolio. Wine-
searcher.com shows that JWM was selling Château Crabitey 2001 for
€177.60 (£126.86) in June 2006. Bordeaux Advisory charged €1745 a case
- €1543.40. Update is puzzled how John Taylor and Bordeaux Advisory
can believe that Crabitey, a minor Graves, is a suitable investment.
Update understands that JWM did not supply Bordeaux Advisory with this
wine.



- Jim Budd. InvestDrinks. 14th May 2007.