A London-based wine merchant which advertised "well above" average returns to Irish clients for investments in Bordeaux and Champagne vintages has gone into receivership.
The company, Croft & Dupont, is alleged to have offered wine of poor vintage at prices far exceeding market value as a "low risk" investment.
According to a director of Dublin wine merchants Mitchell & Son, Mr Peter Dunne, many people who made substantial profits on the sale of Eircom shares last summer reinvested their money in Croft & Dupont.
The company was wound up following a British Department of Trade & Industry (DTI) investigation which revealed that "a substantial portion" of wine ordered by customers had not been purchased. The sale price included storage of the wine for five years.
A company brochure, seen by The Irish Times, advertised the wine as a "low risk" tax free investment, promising "well above average" returns. It stated that wine prices in the well-established international market were generally unaffected by economic trends.
In a statement, the DTI said it appeared that Croft & Dupont had ceased trading and vacated its premises at New Bond Street in London.
Mr Dunne said he had been approached by a number of people who considered investing money in the company.
In one instance, a customer was offered a case of 12 bottles of a 1994 St Emilion vintage titled Chateau Fonbel Grand Cru for £1,425, or about £118 per bottle. Mr Dunne said he discovered the same wine could be bought in Bordeaux for the equivalent of £6 per bottle.
He said he knew of a consortium which lost a £1,400 deposit for 14 cases of a 1993 Bordeaux titled Chateau Branaire Ducru, a wine "available from a number of places".
"It hit a lot of people who had made money from the flotation of Eircom, a number of people who knew nothing about wine," Mr Dunne said.
The DTI said Croft & Dupont had also offer to print customers' names and logos on bottles of champagne it sold.
Company registration information in London lists a Mr Joseph McConville as a director of Croft & Dupont. A British national, Mr McConville has an address in London. The company's secretary was a Mr Mark Kenneth Butt, also a British national.
The Director of Consumer Affairs, Ms Carmel Foley, said she had received no complaints about the firm.
