An Italian wine industry worker in his early 30s, who wished to remain anonymous, said he built up a €25,200 (£21,340) portfolio of nearly 200 wines with Oeno and asked to sell €5,000 worth in late 2021.
It took until September 2022 – nine months – before he was paid €1,380.00 and a further €780.00 in December. By April 2023, he demanded his account be liquidated. In June 2023, he received nearly €6,000 more.
After losing faith in Oeno’s ability to sell, he took possession of the wine itself. He had the bottles transferred from an Oeno facility to a warehouse run by Berry Bros. & Rudd and sold the bottles himself for €6,000 – leaving him with a significant loss.
Another customer, who works in the software industry in London, said they ploughed in £7,000 but claimed Oeno had not handed back the money it had made from a recent sale.
Oeno told this customer it had sold £1,004 of his wine and was awaiting payment from a buyer in Mayfair before transferring the money. Last month, he said he received nearly £500 from Oeno but was allegedly still awaiting payment for the balance.
Oeno told the customer it only paid money to the clients once 100pc of the buyer invoices were paid and the slowness of some buyers paying was affecting its ability to transfer funds to customers.
Oeno told the customer it was not legally obliged to sell any of its clients’ wine and instead they “assisted” the client to sell the wines.
Fine wine as a ‘long-term strategy’
A spokesman for Oeno said its brochures made customers aware that fine wine was a long-term strategy and warned that sales were incumbent on finding a buyer. It also compared fine wine to selling property, meaning it could “take time to liquidate”.
“Like many industries, the pandemic and recent economic and geopolitical challenges have impacted hospitality – so it is more important than ever that potential investors in fine wine are prepared to hold the asset long-term,” an Oeno spokesman added.
For customers who have been caught up in the problem, there are a number of options available, says Peter Shakeshaft, of the Wine Investment Association.
“They can take the wine from the investment company and put it in their own name in a bonded warehouse. Then they’ve got control of their investment and they can buy and sell it as they see fit,” he said.
“Don’t think of [wine] as an immediate ‘go-back to cash’ investment. It takes a while. If the market is sluggish like it is today, bide your time because the market will go back up.”
Oeno did not respond to any of the specific claims made by Gallagher and the two other customers.
However a spokesman said: “Fine wine is a long-term market, which is why we strongly advise any prospective clients to expect a minimum hold period of five years for their wine portfolio – as well as recommending sale opportunities which maximise their return and advising to allow six months for a safer and more efficient exit if they wish to withdraw earlier than recommended.
“Our clients also receive regular insight reports to keep them updated on market fluctuations which impact optimal times to sell. However, we will always do our utmost to find a solution for our clients if needed.”
Oeno said it would “welcome” FCA regulation for fine wine investment and it had not been subject to any legal filings or court proceedings by its clients.
An FCA spokesman said: “Direct investments in products such as wine are not regulated by us. They are risky and there is no protection if things go wrong.
“They should only be sold to experienced investors who understand the risks and are prepared to lose all their money.”