Background
This Ruling forms part of a wider piece of work on unregulated investments, identified for investigation following intelligence gathered by the ASA. See also related rulings published on 13 November 2024.
Summary of Council decision:
Three issues were investigated, all of which were Upheld.
Ad description
Two paid for social media ads seen in June 2024 for Vintage Associates, a wine investment company:
a. A Facebook ad stated, “Discover the stability of wine investment. One of the most stable investments on the market. Inflation and recession resistant for a secure investment journey. Proven growth: Up 600% in the last 20 years…Secure Your Future: Invest in the stability and resilience of fine wine…”.
An accompanying video featured a man explaining where Vintage Associates’ wines were sourced from. He stated, “We deal with five key wine making regions. Those being Bourdeaux and Burgundy in France. And also Italy, California and Champagne … those historically have always been the best performing wines on behalf of our clients.”
b. A LinkedIn ad stated, “Learn to invest… without risking your future”. The ad featured a picture of a wine cask. Text adjacent to the cask stated, “BUILD YOUR COLLECTION OF AGEING FINE WINE. BOUGHT FOR (24/05/2021) £6,550. SOLD FOR (04/05/2022) £11,000 RETURN 67.94% IN ONE YEAR”. Further text at the bottom of the ad stated, “Fine wine has shown average returns of 12% p.a for over 40 years. The longer you hold a wine for, the more rare it becomes. It’s this rarity that improves the value of your current holdings...”.
Issue
The ASA challenged whether ads (a) and (b) were misleading because they:
1. failed to illustrate the risk of the investments; and
2. did not make clear that past performance, examples of which must be representative, did not necessarily give a guide for the future.
3. The ASA further challenged whether the claim “Proven growth: Up 600% in the last 20 years” in ad (a) could be substantiated and was misleading.
Response
1. Vintage Associates Fine Wine Merchants Ltd t/a Vintage Associates acknowledged that the ad did not explicitly state that investments could go down as well as up or that the product was unregulated. They explained that it was always discussed at client consultations but going forward all future advertisements would outline the risk.
2. Vintage Associates said that the examples of past performance in ads (a) and (b) were based on factual information. The references in ad (a) to “Proven growth: Up 600% in the last 20 years” and “historically have always been the best performing wines” were supported by the Liv-ex Burgundy 150 index. The claim in ad (b) that “Fine wine has shown average returns of 12% p.a for over 40 years” came from the Liv-ex Fine Wine Investable Index which had shown considerable growth since 1988. In addition, the reference in ad (b) to the bottle of wine that sold for £11,000 was in relation to a bottle of Domaine de la Romanee-Conti, La Tache. However, they acknowledged that both ads had not included an explanation that past performance was not an indication of future results.3. Vintage Associates said the claim “Proven growth: Up 600% in the last 20 years” was based on the Liv-ex Burgundy 150 index which had shown a 578% growth since 2004.
Assessment
1. & 2. Upheld
The CAP Code required that material information should not be omitted and should be presented clearly.
The ASA understood that the wine investment market was not regulated within the UK, nor was it subject to the protections afforded by the Financial Services Compensation Scheme or the Financial Ombudsman Service. We considered that this was material information that consumers required in order to make informed decisions about Vintage Associates’ services. In addition, marketing communications for investments should make clear that the value of investments was variable and, unless guaranteed, could go down as well as up, and that past performance or experience did not necessarily give a guide for the future.
Ad (a) stated, “Discover the stability of wine investment. One of the most stable investments on the market. Inflation and recession resistant for a secure investment journey” and ad (b) said, “Learn to invest… without risking your future”. However, they contained no information stating that investments were variable and could go down as well as up or that wine investment was unregulated.
Ad (a) further stated, “Proven growth: Up 600% in the last 20 years …” and “… those historically have always been the best performing wines on behalf of our clients”. Ad (b) said, “Fine wine has shown average returns of 12% p.a for over 40 years”, and included an example of wine that was bought for £6,550 and sold for £11,000 within one year. Therefore, the ads referred to the previous performance of wine and we considered the implication from the ads was that it was likely to perform in the same way in the future. We noted however that the ads contained no information to explain that past performance was not a guide for the future. In addition, while we understood from Vintage Associates that Domaine de la Romanee-Conti, La Tache had sold for £11,000 in 2021, we had seen no evidence that the sale was a representative one.
Because the ads did not include any risk warnings to make clear that wine investment was unregulated, that investments could go down as well as up or that past performance did not necessarily give a guide for the future and referenced an example of past performance that was unrepresentative, we concluded they were misleading.
On those points the ad breached CAP Code (Edition 12) rules 3.1 and 3.3 (Misleading advertising), 3.9 (Qualification) and 14.4 and 14.5 (Financial products).
3. Upheld
The CAP Code stated that before distributing or submitting a marketing communication for publication, marketers must hold documentary evidence to prove claims that consumers were likely to regard as objective and that were capable of objective substantiation.
Ad (a) stated, “Proven growth: Up 600% in the last 20 years …”. The accompanying video mentioned that Vintage Associates dealt with wines in five regions, Bourdeaux, Burgundy, Champagne, Italy and California, without referring to any specific wines. Therefore, we considered that consumers were likely to understand from the ad that wines in general in those five areas had grown by 600% in the last 20 years.The information provided by Vintage Associates, the Liv-ex Burgundy 150 index, referred to selected wines from Burgundy having grown by 578% since 2004. However, the source of the information considered the last ten vintages across 15 Burgundy brands and not Burgundy wines in general. It also did not relate to wines in any of the other regions referred to in the ad.
Therefore, because we considered consumers were likely to understand the claim to refer to all wines in the five regions mentioned in the ad, and the evidence only referred to a select number of wines from Burgundy, we concluded that the claim had not been substantiated and was misleading.
On that point the ad breached CAP Code (Edition 12) rules 3.1(Misleading advertising) and 3.7 (Substantiation).
Action
The ads must not appear again in the form complained about. We told Vintage Associates Fine Wine Merchants Ltd t/a Vintage Associates to ensure that future marketing made sufficiently clear that wine investment was unregulated and that the value of investments was variable and could go down as well as up. We told them to make clear that examples of past performance or experience were not necessarily a guide to the future. Finally, we told them to ensure that ads that referenced examples of past performance were representative and that they held documentary evidence to substantiate their investment claims.
