His
company, English Associates (), takes potential investors by the hand and
not only leads them through the purchase process, but helps them start
and run the actual vineyard through the start-up and production phase.
Finding Local Expertise
“We work with the client to help
them find the right property, on a consulting fee basis,” English says.
“But then we continue to work with
the client after they have made the purchase. We look after their investment
and develop it, find the right local people, and become their local eyes
and ears on the ground.”
“The market here is very hot, with
foreign investors taking advantage of the gap in values,” he adds. “With
prices rising dramatically in some areas and no accurate records of real
estate sale prices, it’s easy for someone to get suckered. By looking at
hundreds of properties a year, we have a good feel for real values. Since
we’re not a real estate agency, we can also be impartial about what’s the
best option for the buyer and give the person advice that’s not tainted
by commission considerations.”
English hails from Nashville, Tennessee,
in a region better known for Jack Daniels and George Dickel American whisky
than for wine. There he owned a company that licensed music industry trademarks
(such as Gibson and Steinway) and developed licensed merchandise for sale
in overseas markets.
Ten years ago, at a Rotary Club meeting
in his home town, he found out about a group study exchange program where
participants spend 6 weeks visiting another country, seeing other businesses
and staying in homes of business owners. He followed up on it and in 1997,
was selected for the scholarship and spent a month and a half in Patagonia.
“I fell in love with the country and people,” English explains, “and I
kept coming back on subsequent trips, always looking for opportunities.”
Eventually he fell in love with another aspect of Argentina—his wife Carolina.
English got into the wine business
by default. He started out offering general business services to foreign
investors and foreign corporations, helping people set up locally or form
partnerships. He dealt with the locals and mitigated the investment risk.
Word soon got out to wine investors and real estate consulting followed.
“Because of where we are in Mendoza, most of the companies and individuals
who came to us were looking to invest in or partner with the wine business,”
he explains.
English sees
his role as helping people find success by keeping them out of trouble.
“The most important offering from us has been in keeping people from totally
messing up. Sometimes we’re successful by telling people not to buy a property.
We keep them from spending $200,000 for something that wouldn’t work out
as a vineyard.”
How NOT
to Buy a Winery
Hubris often
leads to an investor’s downfall in the wine region of Mendoza. The most
famous example in these parts is a failed investment by the Kendall Jackson
company of California. They came down to Argentina in 1996 with their own
staff and an attitude that they knew exactly what it would take to launch
a successful winery in the area. They reportedly spent close to 8 million
dollars. In 2003 they declared the adventure a bust and ended up selling
the winery for $2.5 million.
For those not doing the math, that’s
a loss of $5.5 million after 7 years of work. One of the most common mistakes
wine investors make is not making an attempt to understand the people,
the culture, and the way things work in a foreign country. “Ideally, you
do it methodically and slowly and you don’t need someone like me so much,”
English says. “In the best case you would come down here and live for a
couple of years first. Then buy when you know the country, the people,
the region, and the language. At that point you understand the culture,
what the risks are, and what it is really like to live here. Most people
do tend to jump into things too quickly.”
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