Huffpost UK uk
The Blog

Featuring fresh takes and real-time analysis from HuffPost's signature lineup of contributors

Peter Shakeshaft Headshot

Wia and Nfib Will Finally Combat Wine Investment Fraud

Posted: Updated:

The start of 2013 has heralded many good headlines about the health of fine wine investment and it's looking like a positive year for investors.

In January, the industry exchange, Liv-ex, reported that bids on the market had hit an all-time high, reaching £7.9million that week. A market rally, which started in November 2012, has since consolidated with sustained growth of 7.5 per cent, while the industry's pre-eminent critic Robert Parker, is due to publish the rescore of the 2010 wines at the end of February - and early indicators look superb for the vintage.

Despite the general industry positivity, the market has experienced issues with operator malpractice and, in the worst cases, fraud. Such issues have had impacted the reputation of our industry, negatively impacting on consumer confidence and levels of investment.

However, February 2013 has seen the biggest step yet to be taken by the industry to tackle the problem with the launch of the Wine Investment Association (WIA), a self-regulatory body that will establish the standards and best practice that fine wine investment firms should work to.

I have long called for action to be taken by the industry to eradicate malpractice and my firm Vin-X, together with a group of like-minded individuals representing specialist wine investment companies, have formed the WIA to safeguard the interests of investors.

The WIA has received a further stamp of approval from the City of London police, whose National Fraud Intelligence Bureau (NFIB) has joined forces with the body to identify and eradicate fraudulent practitioners in the industry, recognising the WIA and its members as the benchmark for safe investment.

It's clear that we have needed robust regulation to allow wine investment to realise its potential as a mainstream asset class. Regulation will increase public confidence in the industry and allow the sector to grow further.

The fine wine investment market is currently valued at about £2.5 billion globally - a substantial figure, particularly for a previously unregulated market. Historically the sector has enjoyed strong long-term growth and has outperformed almost every financial index in the last three decades.

What's clear is that there is ample opportunity for investors. Following the formation of the WIA, investors will be able to see which firms in the industry have accepted its rigorous code of conduct, with an emphasis on thorough systems, ethical practices and ultimately the prevention of crime.

So what does this mean for consumers? Most significantly, the market will be a safer and more appealing place for people to put their money than ever before. Investors will have the confidence that they can buy safely and that there is a clear exit route. All prospective WIA firms must complete a compliance audit in line with WIA's Code of Practice, carried out by independent auditors, before they can be awarded member status to prove that their systems are robust and fit for purpose and that they are honest, reputable practitioners.

Consumers can be confident that those firms who are members of the WIA, and carry the association's kite-mark, are safe and trustworthy organisations. The formation of the WIA should encourage a wider range of people to consider fine wine as a viable alternative investment option for their portfolio.

The industry has been held back for far too long by unscrupulous practitioners but investors seeking out a market based on top-quality investment can now be assured they will be committing to one with standards to match.

I called the market in August 2012, with the view that prices had bottomed. Whilst this trend continued as a flat-line to November we are now witnessing increased consumer confidence and sustained evidence of value returning to the key brands. The WIA will boost consumer security and the time is certainly right to invest in wine.

For more information please visit www.wineinvestmentassociation.org or www.vin-x.co.uk

Presented By Chivas Regal Scotch Whisky