In November last year fine wine merchant Aston Lovell launched the fine wine industry’s first trading platform that links the private buyer and seller to the London International Vintners Exchange (Liv-ex).
The platform seeks to solve many common problems faced by investors and collectors – not least of which is the dilemma a seller faces when trying to offload wine, a problem that is exacerbated in a falling market (typically, low cash-offers from merchants, high selling-fees and the wine devaluing as a buyer is found).
Director Bruce Aston explained: “We are frequently approached by owners of fine wine to sell their stock for them, because the sale is executed immediately and at the real market price.
“The selling fee we charge is fixed at the lowest rate in the industry (6%) whatever the quantity of wine being sold. When buying using the trading platform, investors no longer have to stick rigidly to the traditional medium-to-long-term view.
“We are pleased to report that with the technical analysis we perform before committing to any purchase, we have made recommendations and executed trades for clients that have netted considerable percentage gains in a matter of months – and sometimes weeks.”
A small selection of these recent trades included: Laville Haut Brion 2003 bought on 23 January for £1,050 a case and sold on 15 April at £1,500. (+43%); Lafleur 1999 bought 12 February for £1,150 a case and sold on 18 April at £1,500. (+30%) and Clinet 1998 bought 22 November 2012 for £600 case, sold on 16 April at £750. (+25%).
Notable features of the trading platform are performance charts, market movers (risers and fallers), the most traded wines on the exchange, online tracking and individual stop-loss and profit-take thresholds.
Aston continued: “Of course, we haven’t re-invented the wheel. When buying shares, the investor buys at the market price. To buy shares in a company listed on the stock exchange for more than market price would be ludicrous (hostile takeover bids excepted!).
“We simply think that the same rules should apply to the fine wine market, because it is perfectly possible, even today, to talk to 10 different companies about the same case of wine and be quoted 10 different prices – prices that can vary considerably.
“While this may be fine if you are buying wine for consumption (you can, after all, shop around) when investing it is essential to know exactly what you are buying into is worth.”
Aston Lovell will be providing the drinks business with regular online updates on the fine wine market with videos and articles over the coming months.