FINE WINE BROKERAGE & MERCHANT SERVICES

FINE WINE BROKERAGE & MERCHANT SERVICES

Wine is less volatile than stocks and shares, making it a less risky investment. Moreover, it is not highly correlated with the stock market, which makes it attractive to investors looking to diversify a portfolio. Decanter Wine makes a strong defensive asset in such times of uncertainty. Diversification of investments is always important, and apart from the indirect effect of high earners suddenly cashing in on luxury items, wine prices aren t hitched to the stock market. Investors Chronicle For the ultimate in liquid investments, try top-quality wine, which has outperformed one benchmark U.S. stock index for 13 years and withstood two recessions. Bloomberg The inclusion of wine in a portfolio and, especially, more prestigious wines, increases the portfolio s returns while reducing its risk. Philippe Masset, Economist, Raise Your Glass: Wine Investment and the Financial Crisis Since 1988, when reliable data first became available, the fine wine market has generated an annualised return of 12.1 per cent. Financial Times

WELCOME TO CAPITAL VINTNERS OUR HISTORY Capital Vintners is a fine wine brokerage and merchant service based in the City of London. Established in 2005, the company has amassed a thriving client base of thousands, offering a variety of services in the fine wine market. We specialise in buying and selling the finest wines, mostly from Bordeaux, but also from other up-and-coming wine regions of the world. OUR SERVICES We provide fully comprehensive fine wine portfolio management We store over 15 million worth of our customers wines in the most secure location in the UK, with all wines stored in individuals private named accounts for maximum protection We are accredited members of the London International Vintners Exchange (Liv-ex), giving us live minute-by-minute market data, as well as offering the service of selling our clients wines over the Exchange With over 1 million of stock at our disposal, we can offer our clients the finest range of the best wines in the world. HOW AND WHY WINE INVESTMENT WORKS The very best Bordeaux wines are strictly controlled by the Official Wine Classification Law of 1855, which was put in place to limit the amount of wine allowed to be produced by the very best Bordeaux châteaux. For over 150 years these laws have created a class of wine with a huge demand and a low supply. Fine wine is an improving asset. Added to the fact that there is a low supply and a high demand, as fine wines mature they become more desirable. The more a certain wine is drunk, the rarer that vintage becomes, further pushing up both the demand and the price. In the last 20 years the fine wine market has outperformed almost every market, including the FTSE 100. The wine market is also far less volatile than stocks and shares. Taking every five-year period since 1988, wine has shown a negative return in just one period with a loss of just 1.1 per cent. Compare this to the FTSE 100, which has seen 72 negative periods, the worst of which being a loss of 39 per cent. Fine wine is almost always free from Capital Gains Tax because it is classed as a wasting asset (however we always advise that you consult your accountant on the disposal of your acquisitions. ) We are always happy to hear from anyone interested in starting a fine wine portfolio with us. TESTIMONIALS I would have no hesitation recommending Capital Vintners to anyone! They do all they promise and more. They are efficient, knowledgeable of the wine business and informative of it for which I thank them. CB, Lancashire I have been a client with Capital Vintners for about a year and a half, and have been very impressed with the help and advice given by all the staff. I have sold several cases, and bought others. The returns have been well above other investments, for example 28.1% and 35.7%, which is superb. Keep up the good work. GS, Dunbartonshire I am in receipt of your letter dated 25th August 2011, containing your cheque for the proceeds of two cases of wine from my portfolio. Thanks for your excellent advice and direction concerning my investments into the wine market. The handsome profits shown in these transactions is a testimony to your guidance and an incentive for me to continue investing in the fine wine market. Suffice to say, I am very pleased with the outcome. RM, Essex Kind Regards, Capital Vintners 3

GLOBAL WINE MARKET REPORT SWAG assets In an era defined by economic instability, quantitative easing and double-dip recessions, it has never been more lucrative to invest in alternative markets. The SWAG group silver, wine, art and gold are the four most reliable assets that can offer high rates of low-risk growth. With governments all over the world keeping interest rates below inflation, drowning in debt and trying to cope with aging populations, traditional markets like bonds suffer greatly. Quantitative easing (the buying of financial assets from commercial banks by central banks to try to kickstart an economy) can lead to higher rates of inflation. The economist Joe Roseman, who wrote the book SWAG: Alternative Investments for the Coming Decade argues that these four assets can act as alternate currencies because they cannot have their supply increased at the press of a button. Once all the Lafite 1982 cases are drunk there s no way of making some more! These asset classes carry no debt, making them far less risky than most other assets. They are also not denominated in any particular currency, meaning you are not hostage to any fiscal policy nightmares (current Eurozone crisis), natural disasters, or even wars. Since 2000, the total return on the FTSE 100 has been just over 30 per cent (the same as inflation). The Liv-Ex Investible Wine Index has risen by 232 per cent, the ArtPrice Global Index by 81 per cent, and silver and gold are both up well over 400 per cent. 4 Much has been said about the BRIC countries and their great potential for growth across many industries and sectors. In this report we look at each country s development in the wine market. To put Brazil, Russia, India and China all in the same category does not do each emerging economy justice. Each market has its own intricacies tax levels, import and export restrictions, consumption trends so it is important to take each country separately. CHINA Confidence in the integrity of the market has brought a huge amount of new money into the industry, helping to open up new frontiers and opportunities. The most obvious amongst these are new emerging markets like China. Jack Hibberd, Head of Data and Marketing at Liv-ex. China has a head start over the other BRIC nations. For a few years now the Chinese have been importing massive amounts of fine wine. In fact many believe the 2010-11 boom in the wine market was almost solely down to the Chinese entering the fray. With over 1.3 billion people and an emerging middle class, China has seen high growth rates for the last few years and in 2013, its economy is predicted to grow again by 8 per cent. Since the removal of all duty-related customs in 2008, Hong Kong has become an epicentre for wine trading and distribution, as well as the wine auction capital of the world. Hong Kong is also the only place in the world that has entered into an agreement with the mainland Chinese government that allows wine imports to go into China under the Closer Economic Partnership Agreement (CEPA). Wine exports to China rose 38 per cent in 2012 (from 2011) to 283 million. Hong Kong sold 144 million of wine in 2011. Hong Kong imported 48 million litres of wine in 2011, up from 40 million in 2010. 62 per cent of these imports in 2011 came from France. China is now the world s fifth biggest wine producer. Recently the country has started to produce some top quality wines (notably from the Ningxia province) which are now being sold all over the globe. This is great news for investors as it means that the Chinese will become more accustomed to the idea of fine wine as a luxury item. Chinese portfolios are diversifying as their palates are becoming more sophisticated. For example China is now the fifth largest market in the world for Burgundy wines. Business relationships between Europe and Asia are being formed all the time. In November 2012 the first château with Grand Cru Classé status Bellefont-Belcier was bought by a Chinese businessman. Robert Parker s infamous journal, the Wine Advocate, is opening up a large office in Singapore. Parker is due to step down as editor soon, and will be replaced by his Singapore-based Asia correspondent, Lisa Perrotti-Brown. What we want to do is help the Chinese customers learn about wines, so that they can discover new châteaux and diversify their tastes. Georges Haushalter, President of the Bordeaux Wine Council INDIA Asian buyers now account for 60 per cent of Sotheby s global wine sales. One example of this extraordinary boom in fine wine sales was the Lafite 2009, which sold for 43,000 a case in Hong Kong, three times the London price. Wine auctions in Hong Kong regularly break records, with cases of top wines going for 30,000+. India has the least-developed wine market of all the BRIC countries with an annual consumption per capita of less than a small glass of wine, but the market is growing. There is a trend among the young and affluent to take on Western trends, but wine does not always suit Indian cuisine and many consumers seek a certain kick to their alcoholic drinks. However there have been recent advances in the market. For example Indian investors and consumers now have access to the very best wines, including Lafite Rothschild, and wine tourism has started to flourish in the country. Industry Size and Projected Growth: The current size of the total wine market in India stands at 1.2 million cases (fine wine accounts for 435,000 cases). Currently the Indian wine industry is growing at the rate of 25-30

The fine wine market is now a truly global business. It is not just limited to the Western World; the emerging markets now make up a large percentage of the import market. China in particular has seen a surge in demand for fine wine in the last five years, and Hong Kong is now generally considered to be the wine auction capital of the world. per cent per annum. The estimated CAGR (compound annual growth rate) is 25 per cent in the premium wine segment for the next five years. By 2017 it is estimated that the market size will stand at 10 million cases, of which imported wines will account for 2 million. Major Wine Consuming Markets: India s main wine consuming markets lie in the cities of Mumbai, Delhi, Bangalore and the state of Goa. Other cities like Calcutta, Pune and Hyderabad are also catching up. Nearly 2 million people in India currently consume wine, with about 10 per cent of this figure opting for wine as their preferred choice. Taxes: India s tax structure currently works against low-end wine, therefore making wine in India a rich man s game at the moment. The differing taxes and regulations from state to state mean that India needs to be treated as a 28-country market, not as a federation. Poor infrastructure can hinder essential components to the market, such as wine storage and distribution. Improved access for European distributors and producers hinges on bilateral trade agreements. Since 2007 an EU-India free trade agreement has been in the pipeline, although nothing has come to fruition yet. Whilst India has huge potential to become the next market boom (due to its population size and its love of Western cultural trends), it is by no means a foregone conclusion. BRAZIL Industry size and projected growth: There are plans to double sales of Brazilian fine wines in the domestic market by 2016, thereby reaching a sales volume of 40 million litres per year. The ambition for 2013 is to increase sales by 35 per cent to 27 million litres. At least 25 per cent of vinhos finos (fine wines) sold through supermarkets must be Brazilian in origin. Another stated aim is to increase national per capita wine consumption from its current low level of 1.9 litres per capita to 2.6 litres per capita by 2016. Current market: Things are looking brighter for the Brazilian wine market after it was announced that the representatives of Brazil s largest wine producers have withdrawn their application for safeguards that would have unfairly put quotas and tax increases on wine. Future of market: The most significant detail amongst Brazilian producers and the government still to be ironed out surrounds a possible minimum price for imported wines. Other actions still to be outlaid in full include joint efforts to reduce taxes on wine, combating black market imports, and the creation of a promotional fund for the vitivinicultural sector. Actions are also to be developed to incentivise bars and restaurants to list Brazilian wines and to provide training for those who work in the wine section of supermarkets. RUSSIA Rosstat (Russian Federal State Statistics Service) estimates the average growth of the wine market in the Russian Federation at 4.6 per cent per annum. Ten years ago more than four bottles out of five came from ex-soviet countries. In 2010, the ratio was less than one in five. The Russian imported market is dominated by European wines, with France, Spain and Italy taking the lead. After taking a big dip in 2009, Champagne sales are rising again. In 2010, shipments amounted to 1,078m bottles, 87.6 per cent more than the previous year. Volume of wine market in Russia (2000-2011), million litres 1058.3 953.8 2010 wine consumption per capita Brazil: 1.79ltr China: 0.69ltr RUSSIA 3.30% growth rate CHINA 15.80% growth rate 409 India: 0.01ltr INDIA 38.30% growth rate 2000 2006 2011 BRAZIL 9.10% growth rate Russia: 8.21ltr UK: 21.6ltr Growth Rate 2007-10 Asia will command 30% of the global spending power by 2030, up from 11% today. Kym Anderson, director of the Wine Economics Research Center 5

DATA AND STATISTICS TESTIMONIALS Having purchased ten cases of wine from Capital Vintners, I have sold one case after holding it for approximately 12 months and making a profit of 22 per cent. The other cases are showing good profits. Capital Vintners have also attended to insurance and storage for my wines, giving a very good service. BH, West Yorkshire I first purchased fine wine from Capital Vintners in May 2009. At the time it seemed too good to be true and I was very unsure that I had done the right thing. However I am happy to say I have sold a case of wine in September 2010 and the resulting return has exceeded my expectations, and hope this will continue in the future. EM, Forfar Parker Points System 96-100: An extraordinary wine of profound and complex character displaying all the attributes expected of a classic wine of its variety. Wines of this calibre are worth a special effort to find, purchase, and consume. 90-95: An outstanding wine of exceptional complexity and character. In short, these are terrific wines. 80-89: A barely above average to very good wine displaying various degrees of finesse and flavour. 70-79: An average wine with little distinction except that it is soundly made. 60-69: A below average wine containing noticeable deficiencies. 50-59: A wine deemed to be unacceptable. 6 There are different stages to the life of a fine wine. Most begin their lives at the en primeur stage. This is a period when the wine is bought by customers, but it is still in the barrel i.e. it has not been bottled yet. After about two years the wine is then released and available to the customer, who can cellar it (usual outcome) or drink it immediately if they so desire. Wines are usually cellared for around 10 years, although it can vary from vintage to vintage. Fine wines mature and become more sophisticated with age. Complex chemical reactions involving the tannins, sugars and acids of a fine wine can change and indeed improve the taste, smell and price. When a wine is ready to drink is dependent on several factors, but ultimately it is the critics that have the final say on the matter (as we will see later on in this section). It is generally thought that fine Bordeaux wines need at least 8-10 years to reach their potential, although of course there have been wines that have matured quicker and others that have taken longer. CRITICS AND THEIR INFLUENCE ON THE MARKET Robert Parker is the most influential critic in the world. He has a profound effect both on the prices and the market demand for fine wines around the world. Parker is the only wine critic in history to be given the highest Presidential Honours by two French Presidents and an Italian President, and his 100 point rating system defines wine criticism. We can look at the graph opposite of the Lafite 1982 as an example of how Robert Parker can shape the market. In 1995 Parker awarded this wine 98 points and said it would be ready to drink by 2003-2005. You can see on the graph that there is a small increase between 1995 and EN 1997. When he returned to the wine in 2000 PRIMEUR he awarded the Lafite 1982 a perfect 100 point score and also made an alteration to his estimate for drinking, to 2007+. As we see from the graph, the market price soars around 2006 and explodes for the next five years. Combined with the Asian market boom in 2008 and a perfect Parker score, the Lafite 1982 is the perfect example of how a wine can produce the most incredible returns on investment, provided you are knowledgeable about the market. Note that in 2010 Parker actually downgraded this wine to 97+, which once again is corroborated by the loss of value in the last few years. Latour, 1986 EN PRIMEUR CELLARED READY TO DRINK Lafite Rothschild, 1982 CELLARED Robert Parker is easily the single most influential person in the world of wine. READY TO DRINK The Observer Anything bearing a Parker score of 90 points plus is sure to be a sound investment. Evening Standard Even though the Latour 1986 only achieved a 91 point score on Parker s first tasting in 1993, his prediction of the anticipated maturity for the wine was 1996-2012. Then in 2000 when he re-tasted the wine, he changed the maturity age to 2005-2020. We can see an increase in value between 1996-98, but it is not until 2005 when the wine s value explodes. In the last decade the Latour 1986 has almost trebled in value.

Capital Vintners is an accredited member of the London International Vintners Exchange (Liv-ex), the global marketplace for trade professionals of fine wine. Established in 1999 the Exchange has brought new standards of efficiency and transparency to a traditionally opaque market. Domaine de la Romanée-Conti, one of the premier wines in the world, produces only 450-700 cases of its finest wine Romanée-Conti pushing demand through the roof. Right, we can see how scarcity can affect the market value of a wine in an astonishingly brief period of time. Note the period after 2011 in particular, as wines tend to take 10 years to reach their consumption age. Allen Meadows, the most respected Burgundy critic in the world, has written that this vintage should be drunk from 2011+ onwards, and has improved his score for the wine from 91 in 2002 to 94 in 2007. With a wine like DRC 2000 which has doubled in value in the cellaring period and has such a limited stock, the drinking stage of this wine should see an explosive rise in value. Cos d Estournel 2000 EN PRIMEUR LIV-EX CELLARED DRC, Romanee Conti, 2000 CELLARED READY TO DRINK READY TO DRINK The graph showing the Cos d Estournel 2000 is not quite as explosive as the Lafite but nevertheless it still shows a strong increase in price over a relatively short period of time. After an initial relatively poor score from Parker of 88-91 in 2001, he upgraded to 92+ the following year, and then the following year he stated that he anticipated the wine would mature from 2010. Parker recognised this might be a rather short-term wine, and the market appears to have mirrored his belief. Liv-ex has built the world s largest database of standardised fine wine prices. As a result, it is the leading source of independent fine wine price information and research, including the industry benchmark Liv-ex Fine Wine 100 Index. From automated data feeds to in-depth research projects, all data is delivered with efficiency and discretion. Liv-ex also acts as the official valuer for many leading wine funds. Liv-ex 50 Liv-ex 100 Other Critics Parker and Meadows have already been mentioned, but who are the other key critics in the wine industry? Jancis Robinson MW is a British wine critic who provides advice for the Queen s wine cellar. In 1984 Robinson became the first person outside the wine trade to become a Master of Wine. The Wine Spectator is a leading publication that specialises in wine. For over 30 years the magazine has reviewed tens of thousands of wines and now organises the Wine Experience every year, an event which attracts worldwide attention. James Suckling is an American wine critic and former Senior Editor of the Wine Spectator. Suckling specialises in Bordeaux and Italian wines. Lisa Perrotti-Brown is an American wine critic who has been given the responsibility of taking over from Robert Parker as Editor of the Wine Advocate. Clive Coates MW is a British wine writer who specialises in Burgundy. He has written dozens of books, most recently, The Wines of Burgundy in 2008. Michael Broadbent MW is a British wine critic who has won countless awards for his dedication to the wine writing. The Liv-ex Fine Wine 50 Index tracks the daily price movement of the most heavily traded commodities in the fine wine market- the ten most recent vintages (excluding En Primeur, currently 2000-2009) of the Bordeaux First Growths. Declared the fine wine industry s leading benchmark by Reuters, the Liv-ex Fine Wine 100 Index represents the price movement of 100 of the most sought-after fine wines for which there is a strong secondary market. The index is calculated monthly. Capital Vintners is also one of the top 10 suppliers to Vine, Liv-ex s storage and transport provider Antonio Galloni is an American wine critic who has worked for The Wine Advocate and now runs his own internet publication. Robert Joseph is a British wine writer and expert who launched Wine International magazine in 1984 and the London International Wine Challenge. 7

France remains the premier wine producer in the world. Its vineyards have been producing the most highly sought-after wines for centuries and continue to do so to this day. However there are other regions in the world which demand attention too. MAJOR WINE ITALY Italy is the only country in the world that produces as much wine as France, with nearly a quarter of worldwide production coming from the country. The UK, Germany and the USA are the leading importers of Italian wine. With over 4000 years of wine production behind them, Italian vineyards produce some incredible wines, including the mighty Barolos and the Super Tuscans that include Tignanello and Sassicaia wines. AUSTRALIA AND NEW ZEALAND One of the largest exporters of wine (especially into the UK), Australia has the reputation for supplying low end wine at affordable prices. Names like Wolf Blass, Hardy s and Jacob s Creek do produce low-grade wines, but if you look beyond the supermarkets, you ll find there s more to these established vineyards than meets the eye. Penfolds is considered one of the best producers in Australia. For example a case of 1990 Penfolds Bin 95, can sell for over 4000. Ever since the wine critic Oz Clarke remarked in the 1990s that New Zealand Sauvignon Blanc was the best in the world, consumers have been devouring wine from NZ s vineyards, especially the renowned Cloudy Bay Vineyards in Marlborough, a region that is said to have the best climate and soil for the best Sauvignon Blanc wines in the world. New Zealand wine production has increased, year on year, since 1995 and now stands at over 200 million litres. 8 BORDEAUX Bordeaux still retains its role as the Mecca of the wine world. Wines have been shipped from the riverside here for more than two millennia, and every year this is the place where merchants and critics come to sample and assess the latest vintage. Robert Joseph, Founder of Wine Magazine The French wine regulatory system is renowned throughout the world as being the oldest, most established, and the most comprehensive. The system, known as Appellation d origine controlée, regulates the maximum amount of wine produced by each château every year, ensuring the supply of best vintages is strictly controlled. 1855 Appellation Laws When London hosted The Great Exhibition in 1851, Britain showed the world that it was a cultural superpower as well as an industrial behemoth. In response to this, at the 1855 Paris World Fair, Napoleon III announced a classification system for the French wine-producing regions. He asked each wine region to create a quality classification to inform people who would be visiting the exhibition. The Bordeaux Wine Official Classification of 1855 remains the most important historical categorisation of Bordeaux wine quality. This classification system divided the best vineyards into five levels of quality (the Growth System), with the highest level of status going to only four vineyards: Lafite Rothschild, Margaux, Latour and Haut-Brion (Mouton Rothschild would also become a First Growth much later, in 1973). These four châteaux were known as Premier Crus. Napoleon s plan was to increase the demand for these great wines by limiting the supply. Within two years, wine sales by the classified producers had increased by over 250 per cent. What does this classification mean to us today? Given its methodology and original intent, the classification could be considered as little more than an historical anachronism. It is true that its relevance has been slightly diminished by the fact that since 1855, many of its Growths have merged or have acquired neighbouring estates which were not even included in the original classification, thereby potentially affecting the quality of the wines for better or worse. Having said that, the 1855 Appellation Laws are still the basis for Bordeaux wine classification, and given that Bordeaux remains the most important wine-producing region in the world, these laws are of vital importance. The First Growths ( Premier Crus ) Château Lafite Rothschild: Paulliac, Médoc region 64 acres of vineyards Annual production of 15-25,000 cases Cabernet Sauvignon (70%), Merlot (25%), Cabernet Franc and Petit Verdot (2-3%) A 1787 Lafite bottle sold at auction in 1985 for 105,000, a record that still stands Château Latour: Paulliac, Médoc region 190 acres of vineyards Annual production of 18,000 cases Cabernet Sauvignon (75%), Merlot (20%), Cabernet Franc and Petit Verdot (2-3%) An impériale (6-litre bottle) sold for 135,000 in 2011 Château Margaux: Margaux, Médoc region 210 acres of vineyards Annual production of 12,500 cases Cabernet Sauvignon (75%), Merlot (20%), Cabernet Franc and Petit Verdot (2-3%) A bottle of 1787 Margaux remains the most expensive bottle ever broken, insured at $225,000 Château Haut-Brion: Pessac-Leognan, Graves region 125 acres of vineyards Annual production of 10-12,000 cases Merlot (45%), Cabernet Sauvignon (44%), Cabernet Franc (10%) and Petit Verdot (1%) First recorded Premier Cru to be transported to the USA Château Mouton-Rothschild: Paulliac, Médoc region 203 acres of vineyards Annual production of 20-25,000 cases Cabernet Sauvignon (77%), Merlot (11%), Cabernet Franc (10%) and Petit Verdot (2%) Every year the Mouton label is designed by a famous artist Dali (1958), Picasso (1973) and Warhol pictured right (1975) have all featured

REGIONS OF IMPORTANCE CHAMPAGNE The most famous sparkling wine region in the world contains some of the most renowned wine producers. Louis Roederer, Cristal, Dom Perignon, Krug, Bollinger and Taittinger are all brands that carry worldwide recognition. Still seen as the ultimate luxury commodity, Champagne not only provides pleasure for millions of consumers, but it also provides investors with a great opportunity to take advantage of the Asian market boom and a scarcity of supply. In China 69 per cent of sparkling wine consumption is currently imported. BOURGOGNE C CÔTES DU RHÔNE The Bourgogne region (also known as Burgundy) has become a genuine contender for the most highly sought-after French area of wine production, largely thanks to the Hong Kong auction market. China is now the fifth largest market for Burgundy in terms of value. Burgundy has more appellations d origine contrôlée (AOC) than any other French region. The most famous estate in Burgundy is Domaine de la Romanée-Conti. These vineyards produce some of the most expensive wines in the world. In 2011 a vertical lot of Romanée-Conti, spanning vintages from 1952 to 2007, was billed as the most important wine lot to be sold anywhere in the world that year. It sold at auction in Hong Kong for 519,020. With only 450-700 cases a year produced by the Romanée-Conti vineyard, the demand for these cases is skyrocketing. The Côtes du Rhône Appellation d Origine Contrôlée wines from the Rhône region are largely produced with the Grenache grape. At the highest level there are 15 Crus that can be labelled with their village names, rather than using the generic term of Côtes du Rhône. These wines include Châteauneuf-du-Pape, Crozes-Hermitage and Côte Rôtie. In recent years single vineyard wines have become popular (thanks to the efforts of Marcel Guigal), with the most lucrative being La Mouline, La Landonne and La Turque (often known collectively as the Lalas). USA In 1976 the Napa Valley received a boost in worldwide recognition when a couple of its wines outperformed several famous French labels. With over 450 wineries in Napa, the Californian wine region is now one of the most popular wine tourism areas in the world. With an annual production of only 400-750 cases, Screaming Eagle is the top name in American wine. The 1992 vintage was awarded a Parker score of 99 points and can sell for over 5,000 a bottle. Opus One another Californian winery was established in 1982 by two of the wine industry s giants: Baron Philippe de Rothschild and Robert Mondavi. Their aim was simple; to create a Bordeaux-style wine with Napa Valley Cabernet Sauvignon. With Rothschild s name on the label, this wine helped to put Napa on the map, and Opus One, together with Screaming Eagle, lead the way in terms of quality American wine. Champagne Bordeaux Bourgogne Côtes du Rhône GREAT BORDEAUX VINTAGES: 1982, 1985, 1986, 1989,1990, 1995, 1998, 2000, 2001, 2005, 2006, 2009, 2010 (the ones in bold are the truly renowned years) 9

STORAGE TESTIMONIALS Another great performance by the Capital Vintners Team! I needed to get my hands on some money in a short piece of time and they were able to do this for me without any delay, keeping me informed throughout the process. I also enjoyed reading their latest newsletter, which was very informative about the wine market. Thank you for all your help, and keep up the good work. H Smith, Buckinghamshire I owned a portfolio of fine wine which included established First Growths and decided to sell to enable a property opportunity. This was easier said than done after many agents just wanted to purchase the wines at much discounted prices. I found Capital Vintners on the internet and approached them directly. The company was very professional and made me an offer in excess of 13% above other offers. The transaction proceeded very well and was completed very expediently. I would strongly recommend the company and will use their services in the future. AW, Stafford 10 Capital Vintners uses Locke-King Vaults at EHD London because it is the perfect underground vault for professional, secure, fully insured storage within 40 minutes of Central London. We currently have over 5,000 cases of our clients wines stored at EHD, worth over 15 million. All our customers have their own private named account, which means that complete ownership is with the customer. Customers can open their accounts in their spouse s names, depending on their choice, if they prefer anonymity. Capital Vintners sends out only one invoice per year every January for your storage. Benefits of storing your wine with EHD and Capital Vintners: Storing wine in bond means it is free from duty and VAT Constant temperature with the ability to control humidity Added security of storing your wines in a subterranean vault We can deliver to any storage facility or we can arrange home delivery (terms and conditions apply). EHD s Fascinating provenance: Concrete-lined, a labyrinth of 2m high by 1m wide corridors became the site s underground retreat for the staff, complete with gas tight doors, air filtration equipment and water supply. At the end of the war, still in their original condition, the shelters were secured, and have lain dormant for over sixty years. When EHD s joint Managing Directors Michael and Stuart Phelps had the opportunity to acquire the site in August 2009, they knew immediately it was the perfect storage facility. All our clients have their own private named accounts EHD s Pedigree: At the heart of Locke-King Vaults concept is a world-class fine wine team. The operation is coordinated and administered by EHD s current staff from the company s main offices and warehouse already on the Brooklands estate. EHD currently stores in excess of 268,000 cases on behalf of over 300 clients. Customers include fine wine merchants, major auction houses including Christie s, premier brands, retailers, media celebrities and private individuals. Capital Vintners are now the third biggest account holder at Locke-King. Business growth has doubled the company s capacity in just two years. The Sommelier Touch : The service element is crucial to Locke-King s customer proposition. Stuart Phelps explains: Fine wine is a delicate, inherently fragile and very valuable commodity. Our existing logistics team is probably one of the most experienced in Europe when it comes to moving and re-siting collections or auction purchases. In particular, we transport and handle our clients wine investments as a sommelier would. Committed to a Better Service: Michael Phelps is convinced his team offers the ultimate fine wines storage package; It s a natural extension of our existing business, he says. If clients have cases at other bonded warehouses, we can easily arrange pick-up to consolidate collections. There s no risk whatsoever just the opportunity to get a better, more professional service with a great annual storage deal. All wines cellared at Locke-King are automatically insured against all risks at full replacement value.

FAQS Why are there no prices in the brochure? The fine wine market is constantly moving and evolving; it is a live market after all. Therefore prices can change quite considerably on a day-to-day basis. Can I drink my wine? Yes you can, at any time (although we don t necessarily advise it). If you take a case of wine out of bond, you will pay 20 per cent VAT, plus 2 per bottle for Duty. So for example, if you wish to take your case of Montrose 2010 that had an In Bond price of 1,850, you will pay 2,248.80 (plus any delivery costs). Can I see my wine? Your wine is stored at EHD London Locke-King Vaults. You can book an appointment (via your Capital Vintners broker) if you would like to go to view your portfolio. Alternatively you can have a condition check of your wine, at a cost of 15 (+VAT) per case. How do I know my wine is in my own private account? New customers receive a Stock Report from Lock-King Vaults, containing the Rotation Numbers of each case of wine. You also receive an online log-in to access your account. Is there a minimum spend? We endeavour to tailor our offers to everyone s needs. Cases range from 500/cs to 75,000/cs. What is Liv-ex? The London International Vintners Exchange is the global platform that is used by merchants and brokers to buy and sell fine wine. As a member of the Exchange (of which there are fewer than 350), we are in a position to offer to connect our clients with the world and can sell their wine on the Exchange. Added to this is the vast amount of data the Exchange can offer us, and in turn, our clients, and it is not hard to see how valuable this partnership really is. For how long should I hold my wine? Our brokers are given daily updates on the market by our Data Team, so they have a vast array of information at their fingertips. Therefore your broker knows best when it comes to holding onto your wine, or selling it. We usually recommend a longer hold than most commodities, as all data in this market points towards a lack of supply pushing up the price of a case i.e. the more cases of wine that you invest in are drunk, the more in demand it subsequently becomes. How do I exit the market? Contact your broker, who will give you the advice that you need to think about an exit strategy. But remember; we take 10% of the total sale price if you sell within two years. Sell after two years of holding your wine and we only take 10% of the profit. If you decide to sell your wine on Liv-ex (through us), we charge 7% of the sale price. What are our storage charges? For new clients, storage for the first case of wine that you purchase from us is free for a year. After that, our charge is 15 (+VAT) per case per year. We also have a standardised minimum term of 6 months, which carries a charge of 7.50 (+VAT) per case. This comes into force if you purchase a case of wine from us after June 30th (the mid-point of the calendar year). I already own cases of wine. Can I sell them to Capital Vintners? If the cases are in good condition and are stored in a reputable UK bonded warehouse, we would be happy to value your wine and make an offer. 11

CAPITAL VINTNERS 1 Cornhill, London, UK, EC3V 3ND 6A Swan Court, Tanner St, UK, SE1 3LE Registered in the UK: 05496760 Tel: 0207 378 3500 Tel: 0800 077 8007 www.capitalvintners.com Follow us on Twitter @CapitalVintners