Wine investment gone sour

PHOTO: Wine investment gone sour

It was too late when manager Clarence Khoo discovered that some Australian wines are not considered "investment grade".

Mr Khoo, 30, started investing in 2008, after his interest was piqued by his boss, a wine collector.

He invested about $6,000 into 72 bottles of Grant Burge Abednego Shiraz Grenach Mourvedre from an Australian wine company, which said it sold investment-grade wines, at an investment fair held at Suntec convention centre in April 2009.

"The broker was offering me a minimum of 10 per cent profit per year, and showed me a letter from the winemaker guaranteeing that," he said.

"I thought it was a good way to diversify my portfolio. I read a bit online, but did not go in depth. That was probably a big mistake."

The drop from Down Under proved a less than gilt-edged investment.

When Mr Khoo tried to sell his wine two years later, all his e-mail messages to the firm went unanswered.

"They are always asking me to buy more wine, without showing me an exit route. The firm has mentioned the possibility of selling at auctions in Shanghai and Hong Kong but so far it has all been talk and no action," he added.

A Facebook group has been created for this particular Australian wine company's disgruntled clients.

Mr Khoo has not lost any money yet but is looking at writing down more than 60 per cent of his initial outlay.

While he is not much of a drinker, he added that he will consider knocking back the wine if the write-down is substantial.

He advises potential wine investors to always do their research, especially on the type of wine that is being offered.

"The amount I could lose is about $6,000. It is not exactly big, but painful nonetheless. The broker was smooth then, but now I am much more wary of things that sound too good to be true," he said.