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Wine Investment Feature                                                                                                   ...
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About The Fine Wine Investment Market- With Entrepreneur Frederick Achom

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Ten years ago last November, Freddie Achom was
contemplating his future, as well as the future and viability of the wine investment market. His newly-formed wine investment consultancy Boington & Fredericks of London had just been suspended from trading by the Department of Trade and Industry for mis-selling wine as an investment. The idea of advising clients to bed down fi ne wine for investment and charging a premium for this service
seemed to be somewhat farfetched to financial regulatory boards.

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About The Fine Wine Investment Market- With Entrepreneur Frederick Achom

  1. 1. Wine Investment Feature Wine Investment Feature properly and have provenance which is proactive advisory company with valued of delivering the goods as some have been extremely important when the time comes to service add-ons usually only found in the known to go under before the wines are put it back on the secondary market”. traditional investment markets. It cost a lot bottled or delivered. A portfolio can be The principles on which this market is more money back then to get new clients or started with as little as £5,000. It is quite based seem solid and in a way have been speculators (as they called them at the time) simple and straightforward. At Bordeaux tried and tested over several centuries. The to become involved. Today we don’t have Wine Company we make it as easy and best wines have shown consistent growth the uphill task of persuading customers to trouble-free as buying stocks and shares from patterns and now compete with traditional trust this market but we do have a lot more a broker. It can all be done over the phone. equity-related investments and commodities. competition which means our mark-ups You are also assigned your own account Though very different products indeed, had to come down somewhat in order to be manager who is always on hand to help the principles that govern success when competitive. The services we offer today are, with queries, recommendations or market investing in commodities are still the same: however, considerably more comprehensive updates. short and finite supply battling against an so we are still different from the merchants ever-increasing demand. This is a 200-year- who now also offer advisory. Is this another bubble? old market and looks to be gaining more Although the enormous rises in wine prices and more supporters as it returns more and Which wines are the best to bed down over the past five years are unlikely to be more profits to those that showed faith in the for investment? repeated any time soon, I don’t see this grapes. The best wines for bedding down for market as a bubble waiting to burst because What led you to get involved in the wine investment are the same as they have always if you look back over the last twenty to thirty LIQUID ASSETS industry in the first place? been, the first growths, the likes of Lafite- years the price rises have been steady and My father collected wine so I have Rothschild, Mouton-Rothschild, Latour, extremely consistent where other markets always been aware of the joys of wine and Margaux and Haut-Brion. There are of have faltered and some retracted. We are especially the quality of Bordeaux wine, course other classified wines from the lower still predicting that prices will increase particularly the ‘82s as he was a huge growths and other appellations that are even more over the next five years. One Investment Entrepreneur Freddie Achom on the admirer of the clarets from that vintage. With regard to fine wine investments, it IGWs (investment grade wines) such as Le Pin, Petrus, Cheval Blanc and Carruades de simple factor is the buyers from the Far East showing more and more interest in fine Fine Wine Investment Market was a market I had heard of on a social basis and had always been a little curious Lafite, but, more importantly, sometimes the vintages can be the make or break factor. wine and they are not simply buying to bed down but to consume. This trend does not about, so when an old friend approached look to be slowing down which will mean me about the idea of starting my own Which Bordeaux vintages would you fewer wines on the market due to regularT en years ago last November, demand than they have ever been. cellar for drinking purposes, like any consider to be the best? consumption. Secondly, the amount of IGW Freddie Achom was Today, Achom is the founder and shrewd businessperson I decided to do a 1982, 1986, 1989, 1990, 1996, 1998 (right being produced by the Bordeaux chateaux contemplating his future, as chairman of the offshore-based Rosemont little research. I analysed three decades of bank), 2000, 2003, 2005, 2008, 2010 (en cannot be increased and, if anything, it well as the future and viability Group who, among its portfolio of market trends and price shifts looking for primeur) but the 1982 is by far the best of seems to be decreasing due to more stringent of the wine investment market. companies, own the majority stake in the more information and advice and I realised the lot. It will be a long time before we see selection of grapes by the chateaux. ForHis newly-formed wine investment London-based wine advisory firm Bordeaux there was a gap in the market as advice a vintage like that again, although we have example, the amount of Latour produced inconsultancy Boington & Fredericks of Wine Company in partnership with wine was hard to come by, or at least advice one come close with the 2000 and 2005! 1982 was 27,000 cases and yet in 2010 theyLondon had just been suspended from enthusiast Anthony Grant. Grant feels they could comprehend! Although experienced only produced 9,500 cases.trading by the Department of Trade have been vindicated by the performance of investors were already doing this, the Are there other wines you wouldand Industry for mis-selling wine as an the market over the past decade. He says he masses were not aware of this market recommend for investment outside What predictions or tips can you giveinvestment. The idea of advising clients feels proud to have stuck at it for so long and at all. Hence the idea to bring it to the of the renowned French regions? for this market in the near future?to bed down fine wine for investment has been able to see the market flourish as forefront was conceived. Though we only recommend Bordeaux, Prediction: more competitor transparencyand charging a premium for this service he always thought it could: “I always knew there are a few regions outside of France that will of course benefit the investor andseemed to be somewhat farfetched to it would come good”, he exclaims, “the How has the market changed that are maybe worth considering. From the more institutional organisations creatingfinancial regulatory boards. “Back then we fundamental principles of this market are from when you first started? Californian greats of Dominus, Opus One wine funds or wine-driven financial vehicles,were selling Lafite ‘96 for £3,900 a case clear for all to see and people have finally My first involvement in the fine wine and Screaming Eagle to Australia’s Penfolds as this market is too viable to ignore.while ordinary merchants were selling at woken up and realised that wine is just as market was in 1999 and it was a Grange, Henschke’s Hill of Grace, Tip: if you already hold first growth wines,approximately £2,000 per case with no viable as any other commodity if not more”. real revelation; I couldn’t believe Torbreck’s Run Rig, Two Hands’ Ares hold on to them for as long as you can asvalue adds. The promise of good returns Prior to the past decade the fine wine investors and particularly and a few others. There are also a few each year they will continue to increaseseemed farfetched, to all and sundry it market has been a patient mans market and institutions had not seen the from Italy such as Gaja, Sassicaia, in value. If you don’t already own wines,looked like a non-starter and the general although the likes of Achom and Grant potential in this market. We Tignanello and Vegas Sicilia from I suggest you start buying because in theopinion was that most would never see a speak of huge returns in the last few years, were offering a finite commodity Spain. words of the world’s most renowned wineprofit”, says Achom. “Today the Lafite ‘96 Freddie Achom it is still very much advised to look at this of limited production and high critic, it’s a no-brainer!is worth in the region of £15,000 per case. with a medium to long term perspective demand. All the market forces How can a potential investorIt was hard then to prove the viability of the Top: A case of Lafite 96, Vintage barrels and abiding by a few basic rules should were in favour of an upward begin a portfolio? Bordeaux Wine Company is now in itsmarket, market data was hazy at best and Right: Grand Vin De Chateau Latour 1983 steer you clear of any potholes. Carolyn trend; more millionaires and For a novice investor we always tenth year of trading and the futurethere was little or no press in favour of wine Holmes, senior wine specialist at Christie’s billionaires being created and recommend doing a little of your of the company looks very positive asinvestment. Today, there is an article every “blue chip” Bordeaux or “first growths” of London believes “any wine you buy for therefore more buyers coming own research on the market so you it now begins to expand its advisoryweek”, he continues. as they are called are the dominant force investment needs a good reputation and into the market, restricted understand the basic principles. services to new regions across the The faith that those like Achom have when seeking wines that can accrue value long track record of success”, while Enzo production meaning limited Bordeaux Wine Company have globe with its first overseas office dueshown in the market has certainly been over time; they now account for over sixty Giannotta, MD at Cult & Boutique Wines, quantity, a more and more been dealing in fine wine for ten to open in Beijing next year and morerewarded with the wine market increasing percent of wine auction sales worldwide. who specialise in new and old-world wines stringent selection process by years but have been offering en planned in Asia and South Americafrom a £7billion-a-year market in 2001 to With the emergence of the Far East and advises to “take advice from those in the the chateaux allowing for lower primeur for just over seven years, over the next five years as demandtoday’s £14billion-a-year valuation and South America as major forces in the fine industry but make sure you stick to blue production but better-quality so our clients are happy to buy en for Bordeaux’s best wines continuescontinuing to grow each year. Industryfigures wine market and little or no real knowledge chip wines, the first growths, as they are wines, all of which would put primeur from us and wait the two to grow. The future is bright for theshow that approximately two percent of of wine, the need for advisory is today even consistent and proven; buy early, preferably an upward pressure on prices. to three years it takes to be bottled wine investment market as well as forall wines produced globally are considered more apparent. Wine advisors like Achom en primeur (wines still in the barrel) but only We were selling the product and delivered. It is imperative you Freddie Achom and Anthony Grantto be of sufficient quality to rise in value with their vast knowledge of wine and the from established merchants. Last but not with a much larger mark-up only deal through an agent or and, of course, the Bordeaux Wineand very few ever break into this tier. The financial benefits and principles are more in least, store the wines in bond so they mature back then because we were a merchant with a proven track record Company.32 33

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