New online trading platform launches with heavyweight backing
- Tuesday 2 April 2013
'Easier and faster': Nick Martin of Wine Owners
The peer-to-peer fine wine trading exchange will open for business before the end of May.
Features on the new site include the ability to create and manage multiple cellars, and a ‘wine passport’ to ensure provenance.
The site has price data on 75,000 fine wines and confidently expects to have 15,000 account holders by the end of August.
However, the key to commercial success should be its independent trading platform from which it will derive the bulk of its revenues. So far, Wine Owners has not announced what commissions it will charge. ‘We will be competitive but not dramatically less so than the brokers,’ founder and executive director Nick Martin said.
‘Not only will the exchange will allow investors and collectors to buy and sell fine wine directly from their portfolios, but the whole process will make trading easier and payment faster.’
Wine Owners will also provide two pricing indices. The ‘WO 150’ will focus on investment grade wines while the ‘Buzz 500’ is a broader index and consists of a basket of the most-searched-for wines on Wine Searcher.
Wine Owners has been privately backed by a number of wine aficionados from the City of London, the legal profession and the wine trade itself.
Nick Martin is himself a long-term collector. He was previously managing director of a global marketing services business and led a European ‘information business’ belonging to a Fortune 500 technology firm.
The board includes Bibendum co-founder Simon Farr, and the founder and former chairman of Metro Bank, Anthony Thomson.
Martin acknowledges that there are similarities between the recently-launched Cavex and Wine Owners, but said, ‘there is plenty of room for a number of players who provide an alternative route to market in what is a very fragmented fine wine sector.’
They would not ‘displace business’, he said. ‘Instead, we believe that we will add transparency and liquidity to the market.’
Trade reaction has been mixed towards both Cavex, which goes 'live' from Thursday April 4, and Wine Owners. According to fund manager Miles Davis of Wine Asset Managers, ‘For private individuals looking to sell wine at cheaper rates, it’s got to be good news. Merchants though won’t be happy about it at all.
‘Clearly, there are a number of well-known established exchanges now such as [Berry Bros'] BBX and Liv-ex. And while Cavex and Wine Owners are slightly different models, it means that people are much more used to the concept now. Ultimately though, the success of the new players really depends on whether they can get enough liquidity.’
One wine merchant, who wished to remain anonymous, dismissed both exchanges’ chances of survival, let alone prosperity.
‘Firstly, if they expect support from the trade, they’re deluded. Secondly, Liv-ex makes most of its money from data rather than trading, which suggests the model is fundamentally flawed. And thirdly, people may try it for a while, but they just won’t stick with it. I’m afraid the pair of them are doomed.’