Sour taste for wine investors as UK firm goes into liquidation

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The Independent Online

The British wine world has been hit by the collapse of a company that sold new vintages to customers who were eager to stockpile wine as part of a long-term investment.

Cellaret, based off Gray's Inn Road near the wealth of the City of London, was placed in liquidation this week after a meeting of creditors. It is not known how many, if any, investors have been left without wine they ordered through the company.

There was no answer from Cellaret's phone yesterday nor from the email address listed on its website which advertised fine wine from around the world.

The collapse is the latest warning signal to investors in fine wines. Cellaret is the third British wine business to go under in little more than a year, following the demise of Mayfair Cellars and the international wine exchange uvine.com.

Cellaret sold cases of 12 bottles from the leading French producing areas of Bordeaux, Burgundy, the Rhone and Champagne, as well as wine from Italy, Spain and the New World.

Vintage champagne, such as a case of 1979 Krug, attracted a price tag of up to £2,500 and the rarest Bordeaux £4,150.

A statement on Cellaret's website told potential customers it had secured £650,000 worth of equity funding followed by a further £4m over the next two years.

But the directors of the company decided to call in the liquidators on Tuesday after problems with the business, which also supplied wine to restaurants.

A spokeswoman for insolvency experts the MacDonald Partnership confirmed the company had been placed in liquidation. It is expected that its stock of wine will be sold off in an attempt to repay its creditors.

Cellaret specialised in selling wine from France to investors hoping to bag a vintage at reasonable prices before the wine matures. It offered scores of cases from such grand vineyards as Chateaux Latour and Lafite, with prices ranging from little more than £100 to thousands of pounds a case, as well as fortified wines.

At the beginning of 2006, Cellaret bought two other companies, the Wine Portfolio and Wine Direct. One creditor, who was owed a significant sum, said that recent fundraising had not been enough to save the business.

The creditor said: "Those people that have invested in new wine in bond, their wine is there. They should have a certificate and they own the wine.

"If anyone was caught up in the unhappy week [last week] before this happened, I don't know what will happen to them."

Cellaret's collapse underlines the importance of treading warily whenever you are investing in fine wines, which ostensibly offer high returns, especially for en primeur cases which can appreciate rapidly.

In April last year, Mayfair Cellars called in the receivers after £1m worth of prestigious clarets and Burgundies went missing from its vaults.

Uvine, which acted as a middleman for wine buyers and sellers, also collapsed with losses of £10m last September.

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