Berry Bros' Cellar Plan

Malthusian

coyrls wrote: »

I don't understand, are you saying there was no actual history of the company before 28 June 2005?

Not for investment due diligence purposes. If you hand BB&R Ltd a load of money for wine and they fail to deliver then you aren't going to have a claim on the assets of BB&R Spirits Ltd or whoever.

Incidentally, in other cases companies changing their name, especially to generic initials, or re-using a name that previously belonged to another of their companies, is a red flag as it makes their corporate history harder to unravel and the company harder to Google. Thus you see companies raising a load of money as Dodgy Property Bonds plc and then changing their name on Companies House to DP Bonds plc to make it harder to find out whatever happened to them.

However, as BBR is by all accounts reputable I see no reason to think this is what they're doing. A red flag does not mean it is a scam, it means further investigation is required, and as far as I can see further investigation suggests BBR is reputable, and not selling an investment in the sense we think of it anyway.

Presumably there is some corporate finance reason why Berry Brothers needed to set up another limited company in 2005, and if it was to take a load of money and run you would think it wouldn't still be active 14 years later.

I don't know what it is and I don't need to find out because I'm not investing money in them.

thegentleway

Malthusian wrote: »

Do you have a diversified portfolio of mainstream regulated stockmarket funds? If not, you should be looking at one of those first. If you do, any particular reason not to add to that?

Yes, I think so. I’ve got some Vanguard life strategy 80% in a S&S ISA, which I am making regular contributions to. I also have a USS Pension, which I have increased my contribution to. I guess I don’t want all my money tied up on the stock market so looking for other investments as well. I’d saved up to buy another student HMO but house prices seems very high at the moment and McLaren are building huge halls close to the University so I don’t think it would be a great investment any more. Basically, I’m looking to invest a lump sump but I’m also lucky that my income is larger than my expenditure so looking for regular investments as well.

DrSyn wrote: »

How did you get to hear about this investment?

I got a call from EnterpriseUK asking me if they could send me information about UKV PLC. I presume it’s some kind of scam but it prompted me to look into reputable wine merchants and I found BBR’s cellar plan.

Thank you for the advice everyone, I spoke to someone at BBR and they were pretty honest that the cellar plan is more about building a nice cellar for you to drink and enjoy as opposed to investing. I think I will put a bit of money in to get some nice bottles for special occasions. Hopefully, I won’t get too much of a taste for fine wines though: some of these wines are ridiculously expensive. It’s crazy to think how obscenely wealthy you have to be to drink them!

Reaper

thegentleway wrote: »

I got a call from EnterpriseUK asking me if they could send me information about UKV PLC.

It would not be my first choice. They have only been trading for 3 years. They came close to being struck off 2 years ago and their current accounts show liabilities greater than assets. OK I guess if you just buy through them and take delivery but I wouldn't enter into any kind of long term arrangement.

DrSyn

thegentleway wrote: »

I got a call from EnterpriseUK asking me if they could send me information about UKV PLC. I presume it’s some kind of scam but it prompted me to look into reputable wine merchants and I found BBR’s cellar plan.

If it was a cold call, then I would think scam and hang up.
Did you have a relationship with EnterpriseUK before this call?

thegentleway

Reaper wrote: »

It would not be my first choice. They have only been trading for 3 years. They came close to being struck off 2 years ago and their current accounts show liabilities greater than assets. OK I guess if you just buy through them and take delivery but I wouldn't enter into any kind of long term arrangement.

Yeah I wasn't thinking of giving them any money. Just explaining that's what prompted me to look into fine wine investments.

DrSyn wrote: »

If it was a cold call, then I would think scam and hang up.
Did you have a relationship with EnterpriseUK before this call?

Yes, that is what I thought but it doens't necessarily mean all wine investments are scams. I think they've called me once before, I wouldn't say I have a relationship with them.

Malthusian

thegentleway wrote: »

Yes, that is what I thought but it doens't necessarily mean all wine investments are scams.

Any wine investment that cold-calls you is a scam.

Wine is not an investment in the sense we usually describe it. Buying young wine and then storing it while it gets tastier is not investment, it's storage. The fact that it will get tastier is already known and priced in. When you buy young wine and put it in your cellar you are paying yourself for the space it is taking up in your property instead of paying someone else to do that job.

While the price of fine wines can go up or down, buying wine in the hope it goes up is not investment either, it's commodity speculation. The price will go up and down but one bottle of wine will never become 1.1 bottles of wine. In the absence of any specialist knowledge it's just a gamble.

Investment is lending unused money to a person or business so they can put it to use and give you more back in the future (keeping some for themselves); when you buy a bottle of young wine there's no lending going on, you've given them money and they've given you wine, the transaction is over.

There is absolutely nothing wrong with buying young wine, storing it for a special occasion, savouring the anticipation and then finally drinking it. And if I was into that I would have few qualms about Berry Bros. But this is all very different from the purpose of investment. If you have no interest in the whole business with the wine and just want to make money, then what has Vanguard and the stockmarket in general done wrong?

thegentleway

Malthusian wrote: »

Any wine investment that cold-calls you is a scam.

Wine is not an investment in the sense we usually describe it. Buying young wine and then storing it while it gets tastier is not investment, it's storage. The fact that it will get tastier is already known and priced in. When you buy young wine and put it in your cellar you are paying yourself for the space it is taking up in your property instead of paying someone else to do that job.

While the price of fine wines can go up or down, buying wine in the hope it goes up is not investment either, it's commodity speculation. The price will go up and down but one bottle of wine will never become 1.1 bottles of wine. In the absence of any specialist knowledge it's just a gamble.

Investment is lending unused money to a person or business so they can put it to use and give you more back in the future (keeping some for themselves); when you buy a bottle of young wine there's no lending going on, you've given them money and they've given you wine, the transaction is over.

There is absolutely nothing wrong with buying young wine, storing it for a special occasion, savouring the anticipation and then finally drinking it. And if I was into that I would have few qualms about Berry Bros. But this is all very different from the purpose of investment. If you have no interest in the whole business with the wine and just want to make money, then what has Vanguard and the stockmarket in general done wrong?

Thank you for explaining. I agree the cellar plan is not an investment but, apologies for being pedantic, presumably you can invest in fine wine, albeit indirectly, if you buy stock and shares in fine wine companies/trackers (I won't be doing that either).

Another reason I don't want to plow all my money into Vanguard is that I'm planning to buy a family home in about 5 years time. From what I undertand, stock market is for long term, i.e. minimum 10 years.

Malthusian

thegentleway wrote: »

Thank you for explaining. I agree the cellar plan is not an investment but, apologies for being pedantic, presumably you can invest in fine wine, albeit indirectly, if you buy stock and shares in fine wine companies/trackers (I won't be doing that either).

Investing in a wine company is very different from investing in wine in the same way that investing in a gold miner is very different from investing in gold.

While it is true that investing in one is indirectly investing in the other, by investing in a company you are also exposed to a whole load of other factors. For illustration, one of the most popular gold equities funds, BlackRock Gold & General, fell 50% during the 2008-09 financial crash while gold the metal rose 50%. Anyone who thought they were "investing in gold" was probably quite disappointed.

Another reason I don't want to plow all my money into Vanguard is that I'm planning to buy a family home in about 5 years time. From what I undertand, stock market is for long term, i.e. minimum 10 years.

As is any non-cash asset. The difference between bottles of wine and a diversified multi-asset fund like Vanguard is that a bottle of wine may never generate a return over any time period, no matter how long you wait - except the pleasure of drinking it.

Why five years? Generally it is advised to take a minimum five-year view for stockmarket investment. The trouble with saving for a house for five years in cash is that you are running to stand still; some of your savings will disappear due to house price inflation. If you save in stockmarket-linked investments instead you may get unlucky and have to wait 6 years to buy your house, or you might get lucky and only have to wait 4 years thanks to not running to stand still.

thegentleway

Malthusian wrote: »

Why five years? Generally it is advised to take a minimum five-year view for stockmarket investment. The trouble with saving for a house for five years in cash is that you are running to stand still; some of your savings will disappear due to house price inflation. If you save in stockmarket-linked investments instead you may get unlucky and have to wait 6 years to buy your house, or you might get lucky and only have to wait 4 years thanks to not running to stand still.

Thank you for the advice. I agree about our cash rotting away in low interest accounts, hence why we want to invest it! We are planning to wait about 5 years to buy family home as I currently get accommodation included with my volunteering role. It's suitable for a family but we will want our own home in order to live on a street with other families/get into good schools catchment areas etc... I guess we could buy the family home now, rent it out for 5 years then move in but we should be able to buy something better/bigger in 5 years (we will have saved more and have bigger incomes).