The director of an Auckland fine wine brokerage is defending misleading claims that have appeared on his investment firm's website, saying "this is what all businesses do to attract work".
James Colley, 29, set up Bordeaux NZ this year after returning to this country from Britain, where he spent seven months working for a wine investment firm.
The company offers New Zealanders "a simple and cost-effective solution to trading investment-grade fine wine as a commodity on the open market", according to its website.
Despite the only contact number on the website being a cellphone number and the company's registered office being Colley's home in Mt Eden, the website was yesterday claiming that Bordeaux NZ had a "team of professional consultants".
Additionally, the contact page told users to "leave your details and one of our senior traders will contact you straight away".
But after being contacted by the Business Herald, Colley confirmed that Bordeaux NZ was a "one-man show".
And by yesterday afternoon the text on the contact page had been changed to "leave your details and a consultant will contact you straight away".
Colley, Bordeaux NZ's sole shareholder, said he had a job at a logistics operator and ran the wine investment business in the evenings and weekends.
When he established Bordeaux NZ it was his intention to quickly employ traders, Colley said, but the business had not taken off as expected and it still had not traded any wine.
Asked about the website's claims of Bordeaux NZ having consultants and traders, he said, "I wanted my business to be marketed in a professional way so that I might attract investors. This is what all businesses do to attract work."
The activities of Bordeaux NZ did not fall under the Financial Markets Authority's oversight for a number of reasons, including the fact that wine was not considered a security under the Securities Act, a spokesman for the regulator said.
Colley said the seven months he spent working for London-based brokerage Capital Vinters was suitable experience to run his own firm and offer advice on wine investments.
"There's a lot of information I get sent through to me each day from blogs and websites and the Financial Times."
Colley said Bordeaux NZ did not cold call potential investors, instead relying on the website and "talking to the media" to promote the business.
The National Business Review published a lengthy profile story on Bordeaux NZ in September, with the online version of the story running under the headline "Fine wine should be part of your balanced portfolio".
In that article Colley said that while fine wine investment had little profile in Australasia, it was becoming a hot commodity as a result of rising demand in China and India and one product he knew of had lifted in value by almost 220 per cent between 2006 and 2010.
According to its website, Bordeaux NZ takes 10 per cent of any profits made on wine that has been held for its clients for more than two years. If a customer's wine is sold before the two years are up, the firm charges 10 per cent of the sale price.
Prices for "first growth wines" start at around $8000 per case of 12 bottles, according to the website.
Fine wine investing has become a controversial topic in Britain where, according to a BBC report, investors are estimated to have lost £100 million ($195 million) through failed investment schemes in the past four years.
Colley said many British wine investment firms had held clients' products in company-operated accounts at bonded warehouses, meaning creditors pounced on the wine when firms went into liquidation. Bordeaux NZ recommended clients store their wine in a private account, in their own name, in a bonded warehouse in Britain, he said.
Jim Budd, a London-based fine wine investment commentator and blogger, said people wanting to invest in wine should use reputable firms with a proven track record. He said Wine-searcher.com, a New Zealand-based website, was a good source of information.By Christopher Adams Email Christopher