Why Wine Investment Scams Keep Happening

A look at the grey areas of wine investment to understand why wine scams are so painfully common

A version of this article is published on The Black Label, the monthly newsletter of 67 Pall Mall, the world’s first private members’ club for wine lovers.

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What’s the most common phrase you hear about wine investing? It’s this: “…and if it all goes wrong, at least you can drink the wine!!” That always gets a laugh.

Not so fast. In December 2025, self-proclaimed wine investment firm Oeno Group went bankrupt, exposing more than £71 million worth of wine that appears to have vanished into thin air. London City Bond claims there is only £5–10 million (depending on the valuation) worth of Oeno stock at its premises in Burton-Upon-Trent, before accounting for roughly £7 million in debts and, of course, liquidators’ fees.

It’s fair to say there’ll be no consolation drinking for Oeno’s unfortunate investors.

Financial wine scandals so resemble one another that we do not need to know too much about the course of this one.

They may or may not begin as legitimate businesses, with the genuine intention of offering investors returns while accompanying them on a journey through the world of the noble grape. The wine itself may or may not have been there from the start, but who would think to check? Then come the grand wine tastings in Venice, followed by lavish portfolio events. By the summer of 2021, they may have opened their doors at London’s Royal Exchange, beside the Bank of England. For all the hatred the wine industry supposedly harbours towards wine investment, there seemed to be little besides praise and gushing reviews. There may have been disputes between the three owners, unresolved game of thrones behind the scenes. Then came the first signs of disappointment bubbling to the surface: monthly reports sent to clients saying their wine portfolio was up 20%, only for investors to discover — once they wanted to sell — that it was actually down 30% after transaction costs and other fees. That was 2023. The wine market had just turned negative, and it still seemed plausible for investors to double down while prices were low. They would pay the familiar price for it. By 2025, Oeno Group had seemingly disappeared, and some investors were beginning to fear their wine had too.

The trouble with wine investment, as anyone trying to sell their own home will know all too well, is that it’s less about buying and more about selling it. There is no shortage of people who supposedly know what makes a good wine investment, which bottle to buy, and who the next big thing is going to be. There are far fewer people who can actually sell the wine — never mind during a crisis such as the one that has afflicted the wine market since late 2022.

And this is the origin story of many financial debacles: the inability to sell, the mounting financial pressure, and eventually, the going rogue.

I said earlier that financial wine scandals often resemble one another — not so much in their specific mechanics, which are as infinite as human creativity itself, but in the fact that they are all ultimately steeped in the wine itself: the bottle. Whether the fraud involves fake portfolios, Ponzi schemes, or counterfeiting — scammers sell “investment wines” that do not exist and it always comes back to the same thing: selling a bottle that isn’t there.

Keeping an eye on the bottle one buys should be simple, but it isn’t. Ensuring that the account at the bonded warehouse is in one’s own name rather than the merchant’s is the first step towards taking control, but collectors need to go further. They should ask for rotation numbers and photographs of the bottles with their name attached, and ideally visit the warehouse themselves to confirm the stock is actually there. But even that is not always enough. Think of En Primeur: until delivery, there is often no real way of knowing whether a merchant has actually purchased the stock on your behalf.

I do not write this to encourage paranoia around every wine purchase, but rather to highlight another grey area — one that works well for the vast majority of honest participants, yet still leaves room for those looking to take advantage. The more grey areas that exist, the greater the potential for fraud.

That said, average losses from individual wine frauds are in the region of £100 million or less — a significant figure, but still nowhere near the scale of broader financial scams such as the $65 billion Bernie Madoff Ponzi scheme.

My first job in the City, in the aftermath of the 2008 financial crisis, involved cold-calling clients of a trading platform to inform them about new rules. I had to collect their full names, company details, and proof of identity before they could continue trading complex financial products. “John from Dallas” was no longer sufficient as an ID if they wanted to trade credit default swaps or oil options on that or any other platform. Unsurprisingly, many of those conversations were unpleasant. Traders were used to the simplicity and anonymity of these loosely regulated markets. They liked the grey areas of finance — the parts where fewer questions were asked.

And what’s not to love? In wine investment, there seems to be almost no limit to what you can say or do.

Guaranteeing returns? Of course.
Using conveniently arbitrary timeframes to present flattering performance narratives? Absolutely.
Calling yourself a “wine investment” company while simply buying wine and selling it on at a hefty mark-up? Why not — what harm can a little conflict of interest do?
Keeping clients’ money on the company balance sheet without ring-fencing it from day-to-day operations? Perfectly normal.
Using customers’ wine as collateral for directors’ personal loans? Now that’s innovative finance.

These are not fictional examples dreamed up by a cynical imagination—mine. They are daily practices that are of the wine trade. And they tend to work, sure, until they don’t.

Bernie Madoff, arguably the most successful financial scammer in history, managed to operate his Ponzi scheme for more than forty years. Then, one day, it collapsed. What triggered it? The 2008 financial crisis, which spooked investors into asking for their money back all at once.

Interestingly, it was also a crisis — the prolonged downturn that has gripped the fine wine market since late 2022 — that unravelled Oeno Group.

Perhaps there will be more cases like this before the market turns, which makes now the time for collectors and investors to check where their wine actually is.

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Another grey area that came to mind after the article was published is the question of expertise of self-proclaimed “wine investors”.

Alongside guaranteeing returns, using conveniently chosen timeframes, operating as a “wine investment company” while simply buying and selling wine at a mark-up, keeping clients’ money on the company balance sheet, or even using customers’ wine as collateral for directors’ personal loans, there is another fundamental issue.

Who is actually qualified to manage wine investors’ money?

There is nothing stopping someone from investing their own money but managing other people’s money is different. It is a regulated activity designed to ensure that those making investment decisions are competent and subject to oversight, which doesn’t guarantee success, but it does raise the bar.

Yet wine investment often assumes that wine expertise translates into investment expertise. Even among well-intentioned operators, basic investment mistakes are common. That’s hardly surprising. Knowing how to assess a vintage, build a cellar or spot an up-and-coming producer is not the same as understanding portfolio construction, risk management, valuation or fiduciary responsibility.

Again, wine expertise and investment expertise are two different things. The industry often treats them as if they were the same but it shouldn’t.