Uvine heralds new era for wine trade

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The former international head of wine at Christie's has led a revolution in direct trading of wine between buyers and sellers. 

Uvine has developed a stock market for wine, incorporating a simple bid and offer system. This allows people to trade fine wines as easily, securely and anonymously as they do stocks and shares. It is a fundamentally new concept which provides a completely neutral trading forum to aggregate a fragmented market. 

The company offers: 
*a stock exchange for wine, open to everyone 
*instant access to prestigious wines 
*transparent market prices 
*quality and provenance guaranteed 
*3.5 per cent exchange fee either side - the lowest in the world as at May 2000
*immediate execution of wine portfolio decisions 
*anonymous and secure trading – guaranteed settlement 
*storage and insurance in secure, controlled conditions 

The management team is led by chairman, Christopher Burr, M.W., one of the world’s leading authorities on wine, who until April 2000 was international head of wine at Christie's overseeing sales in London, New York, Los Angeles and Tokyo.

Andrew Halstead, chief executive officer, is a wine and software entrepreneur who has set up a number of private companies including Vermilion, the wine financing company. 
Richard Laughton, managing director, was online business development manager for United News & Media, examining investment opportunities and advising group companies on online strategy. 
David Gower, the international cricketer, has joined as head of external affairs and provides a unique combination of media contacts, good commercial experience and a love of wine. 
Financing for uvine includes a number of backers, the major investor being the multi-billion dollar US fund, Moore Capital. 

The global wine market is estimated to be worth some £90 billion, of which the market for internationally traded fine wines is worth some £1 billion. Wines with a collectible potential are generally released at a minimum of £15 - £20 per bottle. In terms of the investment potential of wine, an investment in first growth 1982 claret would now represent a growth in excess of 1000 per cent. Average growth in the top 600 regularly traded wines since 1995 has been over 300 per cent. 

Uvine has developed a customised settlement system, triggered on the successful completion of a transaction, which ensures automated dealing with all aspects from invoicing through to transportation. 
The market for trading fine wines has to date been dominated by merchants, brokers and auction houses. Merchants and brokers typically charge 10-15 per cent on pure brokered deals and 25-30 per cent if they hold the stock themselves. Auction houses charge up to 10 per cent on the seller's side plus 10-15 per cent on the buyer's side, with online operators such as winebid.com charging 12.5 per cent either side of the transaction. uvine will charge a flat 3.5 per cent on either side, representing the lowest trading commissions in the world, both offline and online. 

There is some nervousness about buying fine wine over the internet. The incidence of fraud with the most valuable collectible bottles, like Petrus and Domaine de la Romanée Conti is well documented, although small. More significantly, provenance and the condition of wine during storage and handling is the major concern for any serious merchant or collector. The company guarantees the condition of any wines traded on the site, with a full refund if the wine is proven to be below the acceptable standard for that vintage. 

The Uvine site is available for registration with immediate effect, and will go live with trading in May 2000. 
Commenting on the launch, Christopher Burr said: “It is right that Uvine should start its stock exchange for wine in London, the hub of fine wine trading for the world. A stock exchange for wine will revolutionise the way wine is traded. I believe that the majority of fine wine will be traded this way in the future – leaving the traditional auction houses to handle individual bottles and small batches of rare or esoteric wines. Based on the knowledge and experience that I have gained throughout my career, I believe that uvine will provide an invaluable service to the wine industry.” 

Andrew Halstead added: “Our approach has been essentially to ask: How do we build a profitable business from a great idea? Undoubtedly, without the internet, this business could not have been built. However, we have steered clear of a reliance on nebulous future revenue streams and hype that has characterised a number of other new businesses using this channel.”

Richard Laughton commented: “The internet provides a unique ability to bring buyers and sellers directly in touch. Wine is the ideal commodity for trading online. Our strong belief is that we will significantly increase turnover in this market bringing the benefits of transparent prices and instant execution to all industry players.”

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