UK government warns against drinks investment frauds
December 20, 2001
Jim Budd 20 December 2001
The Department of Trade and Industry has taken the unusual step of warning potential investors of the dangers of putting money into wine and art.
In a press release entitled 'Ask & think before you invest in art and drink' the DTI – a UK government department – warns, 'Experts believe that around £50 million (US$70m) may have already been invested in wine worth less than half that sum.'
The department sets out a number of guidelines to help investors. It advises anyone thinking of reaching for their cheque books to 'Make some enquiries about the investment product and the sales organisation,' and 'Don't assume someone who calls himself a broker is honest, regulated or acting in your best interests.'
Consumer minister Melanie Johnson says would-be investors should think carefully and take independent, trustworthy advice before committing themselves. She warns, 'Some companies are preying on peoples' naivety about wine as an investment. As with all investments, if you don't understand it yourself, take advice from an independent expert who does. In other words, take time to ask difficult questions, consider the answers carefully and check them with someone you can trust.'
The DTI has investigated 11 companies and has closed down several, including Ashley White Ltd in January, Ashley Witter in March, and Harley Fine Wine in August. Recently petitions have been presented to wind-up Boington & Fredericks, City Vintners, Goldman Williams, VCA Vintners and one company that the DTI cannot name. Further petitions may be presented by the department early in 2002.
In February this year four men were jailed for over 20 years in total for their parts in drinks investment scams, as reported on decanter.com. In November another fraudster was ordered to pay over half a million pounds for his part in an investment scam (see Related Stories).
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