Four fine wine investment companies have been rapped for failing to adequately communicate the risks of using their platforms in social media advertising.
The ASA has this week published rulings against four fine wine trading platforms as part of a wider body of work on unregulated investments. It published similar rulings against two whisky investment companies last August.
The advertising watchdog scrutinised social media adverts from Vintage Associates Fine Wine Merchants, Cult & Boutique, Vinverum and Cult Wines. In total it found six ads to be in breach of CAP Code rules around misleading advertising, qualification and financial products.
Many of the adverts failed to illustrate the risks of investments and did not make clear that past performance was not representative or a guarantee of future returns, the ASA said.
One ad by Vinverum said the company could provide “proven tips for maximising returns on your fine wine collection”. This claim, the ASA said, was misleading and could not be substantiated.
In another ad Cult & Boutique said fine wine had “delivered an annualized return of 13.6% over the last 15 years” – a claim the company failed to back up with sufficient evidence when requested.
As wine investment in the UK was currently not regulated or subject to protections afforded by the Financial Services Compensation Scheme or the Financial Ombudsman Service, companies needed to make this information explicit in their advertising, the ASA said.
“We’d advise companies operating in this space to remember that people are unlikely to have experience of understanding wine investments,” a spokeswoman for the ASA said. Information explaining that wine investments were unregulated and their value could go up and down needed to be “presented prominently and be sufficiently clear in an ad”, they said.
“Any claims about returns rates or past success need to be representative and must be able to be substantiated,” they added.
Cult & Boutique said it had made “immediate” changes to its advertising following the ASA’s investigation.
“We recognise the importance of clearly communicating the risks of the wine market, and we have always aimed to provide potential clients with comprehensive information about both the opportunities and risks,” a spokesman for Cult & Boutique said. “Although this information has been readily available on our website and in our literature, we understand the importance of making these details more prominent in our advertising.”
Vintage Associates Fine Wine Merchants, Vinverum and Cult Wines did not respond to requests for comment.
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