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Safety First

How to make your wine safe in one easy step:

Open your own account independent of any merchant

The looting of the customer reserves of Mayfair Cellars Ltd by Dominic Smith, their finance director, over a period of four years shows just what can happen to wine stored on your behalf by a merchant. Fortunately this is a fairly rare occurrence but there are other solid advantages to storing your own wine in your own account.

  • Customer reserves are not one of the most profitable parts of a wine merchant’s business. It tends to be expensive to administer and may have a low priority.
  • A merchant will not necessarily store their customers’ wines individually. For example they may store all the Latour 2000s together, so you cannot be sure that you will actually end up with your pristine case that you bought on en primeur but may find yourself as a less proud possessor of a more widely travelled case. There is also a possible danger that should the merchant go bust that the liquidator might consider these grouped wines as part of the assets of the company.
  • There have been instances where a ‘merchant’, faced with an urgent order, has ‘borrowed’ without the client’s permission or knowledge from customer reserves to pay back later. investdrinks has no idea how prevalent this obviously entirely unacceptable behaviour is but it seems clear that it happens from time to time. 
  • Having your own independent account makes it easier to buy wine from a number of different sources. 
  • With the price of the top wines continuing to rise, it makes entire sense to have full control over your wine. Make sure that it is fully insured at replacement value.
  • A number of the leading wine merchants and brokers refuse to store customers’ wine - urging them to make set up their own independent account.

How and where to open your own account

The UK’s two leading in-bond warehouse companies - London City Bond and Octavian both offer a private customer reserve service.

London City Bond ( has special facility called The Vinotheque at Stoke-on-Trent for private customers ( and you can download an application form from the site. Tel number: 01375-853700.

Octavian Vaults (, which is part of the Cert group, has a widely admired facility at Corsham. For details email or call Jane Renwick on 01225 810735. Octavian lays great stress on the quality of its storage and has recently introduced their Certificate of Pristine Storage (

London City Bond now has over 8000 private customer accounts, while Octavian has 1800.

Some wine merchants have their own bonded warehouse. One of the most prominent is Seckford Wines, who have their own bond in Suffolk (

Bonded warehouses - a caution

It is important that you do your own due diligence on bonded warehouses as over the years some have gone bankrupt or been closed by Customs & Excise. About two years ago there was a case where a small bonded warehouse alleged that a customer’s stack of boxes came crashing down breaking all the bottles. Soon after the company went into liquidation and a new company started up. Despite legal action the unfortunate customer has been unable to get compensation. Look at their track record, the bonded warehouse’s accounts and their conditions of storage. Octavian and London City Bond are the two largest UK companies offering private storage accounts and both offer the possibility of visiting their storage facilities.

An alternative

If you don’t want the hassle of managing your own account, especially if you live abroad, it may well be worth using a company who will manage your wine for you. Companies, like Private Reserves Ltd and Nexus Wine Collections Ltd ( or ), will do this for you. At Nexus contact Mark Bevan on 020-7629 3777 or  At Private Reserves Ltd contact laura Goedhuis, Beth brown or Julie Eurich on 01604-770759 or Private Reserves does have a web site but it is unfortunately only accessible through Internet Explorer.

Joint account?

If you plan to open a joint account it would be wise to specify whether instructions are needed from both parties before the wine can be moved or sold. Of course this is standard practice when opening a joint bank account.

Check before you move

Before moving your wine out of a merchant’s customer reserves it would be wise (especially if your wine is valuable) to visit the warehouse (or nominate someone to visit for you) where it is stored and inspect your wine - taking pictures of all of the cases. Everything ought to be in order but this should avoid any disputes about damaged or split cases.


How your wine has been stored and where it has travelled can make a big difference to the price. The less a wine travels the more it will keep or enhance its value. Wines bought in the UK that have travelled across the Atlantic or Asia-Pacific are likely to fetch considerably less than wines that either have remained in the same bonded warehouse or in the cellars of the château where they were made.

There are also a disturbing number of fake wines - especially famous bottles of old Bordeaux such as Cheval Blanc 1947, Mouton-Rothschild 1945, first growth 1961s etc. Make sure that you buy from a reputable source and if buying old vintages get them authenticated before buying.


2006 en primeur
(Posted 20th April 2007)

Should you buy? Why buy now? Precautions to take.

Following the tastings in Bordeaux at the beginning of April, the 2006 campaign Bordeaux en primeur campaign is now being cranked up. Press releases touting the ‘utter must-have wines’ are starting to arrive.

Hang on a minute - why should 2006 be a vintage you have to have and why buy now?

The Bordelais and the merchants, whether in the UK or elsewhere, face a difficult task this year. Unlike 2005 when conditions were close to ideal, the 2006 vintage was very far from easy. August in Bordeaux was cool with periods of rain. The saying in Bordeaux has always been that ‘August makes the vintage’, so why should 2006 be any different?

Admittedly I have so far tasted very few 2006s but those that I have tried have not been impressive with rather green tannins. 2006 was a great year for mushrooms including truffles as Jancis Robinson MW pointed out in the Financial Times on 13th April 2007. It was a great year because the wonderfully damp, humid conditions - the exact opposite required to produce a crop and ripe, healthy grapes.

In the FT article Robinson’s advice on 2006 en primeur purchases was: ‘I would say that, with a handful of exceptions, this is a vintage to be bought by wine lovers only if they have an empty cellar they are dying to fill.’

‘Most years there is a common theme to the primeurs’ sales pitch. This year it has been that many vintages have in the past been erroneously overshadowed by the one that preceded it: 2004 by 2003, 1996 by 1995, 1990 by 1989, 1986 by 1985, for example. We are meant to believe that by association 2006 is in danger of being overlooked because we are dazzled by the greatness of 2005. Do not fall for this.’

Tom Cannavan’s summary of 2006 on his wine-pages ( also suggests that buying 2006 en primeur is not a very attractive proposition.

‘Apart from price (more in a minute) the stories of this vintage are basically about two things: management of tannins, and getting enough flesh and charm into the wines. The nature of the weather in most of Bordeaux meant that it is a year of moderate to good fruit (except for left bank Merlot as a generalisation) but really quite aggressive tannins and quite high acidity. Many wines display very "furry", rough tannins, and others a very, very chalky dryness that, if there is insufficient plumpness and flesh to the fruit, are a bit problematic making the wines inky and a bit charmless. And that's only likely to get more pronounced with time as it is the nature of the tannins and fruit rather than just the effective levels - many wines show identical technical analysis to 2005, but taste very different.’

‘A fascinating week of tasting (I still have some minor appellations to add) that showed better wines overall than I might have thought, but undoubtedly a tough vintage and nowhere near the quality of 2005 or 2000. If prices don't drop significantly, don't the 2004s look like good value? Arguably slightly better wines.’

The chances are that the Bordeaux châteaux will not reduce their prices sufficiently to make 2006 a sensible buy and the betting must be that many of the wines will be similarly priced (or cheaper) when available in bottle at the end of 2007/early 2008. I also suspect that 2006 will not be an ‘investment’ vintage and that prices are unlikely to rise substantially long-term. The Bordelais are likely to argue that 2006 was expensive to make because of the difficult conditions meant that they had to be very selective and discard a large quantity of grapes. Had they used this argument last year then the 2005s should be cheaper than the 2006s will be. But, of course, they are not as they pushed up the 2005 prices to take the maximum profit from a good and easy vintage.

If there is doubt about ‘must-buy’ now, there is probably little about this being for many a ‘must sell’ now vintage. Merchants and brokers’ shareholders will have loved the profits that the 2005 en primeur campaign delivered and are doubtless thirsting for more.

investdrinks thinks that it is best wait until the market has had time to consider coolly the merits or otherwise of 2006 and wait until the wines are in bottle before deciding whether to buy or not. Let the froth and hype of the en primeur campaign die down. I would turn down the wine trade’s request for a two-year loan

Precautions to take if you do decide to buy.

Grant Thornton, the administrators for collapsed Mayfair Cellars, has discovered what a legal minefield en primeur is if things go wrong.

Remember that the essence of the en primeur system is that you make an interest free unsecured loan to the fine wine sector for up to 18 months to 2 years in the hope that you will both get the wine you ordered (normally fulfilled but not invariably) at a lower price than you would have to pay if you waited until the wine was finished and bottled (occasionally but very far from invariably).

Just a banks carry out checks on people applying for loans so too should you check your merchants’ credit-worthiness. Check out company accounts on the UK Companies House web site ( They now only cost £1 to download. You might consider a Dun & Bradstreet report ( but these are considerably more expensive.

Questions to ask the merchant

Do they ask the Bordeaux négociants with whom they deal for a bank guarantee?

There are two areas in the en primeur process where the financial risk is highest:  your wine merchant and the Bordeaux négociant company. Your merchant can ask the Bordeaux négociant to take out a bank guarantee, which means that should the négociant run into financial problems the money paid to them will be refunded. investdrinks understands that this costs about 0.5% of the sum deposited with the négoce.

Although a bank guarantee adds a little to costs, investdrinks believes that   this should become standard practice. It can be argued that they are not necessary when dealing with long established négociant companies but longevity is not necessarily an assurance of financial health.

Unfortunately there does not seem to be away of guaranteeing that your merchant pass your money onto the Bordeaux négociants. Both Mayfair and uvine failed to pass monies on. uvine even promised to put en primeur money into a separate account - apparently this did not happen. This was also the case in earlier en primeur scandals such as The Hungerford Wine Company.

What bonus system do they operate - capital or profit related?

If it is capital related then the emphasis is likely to be achieving a high turnover, so it may encourage staff to push high value wines. Whereas profit related may encourage staff to push clients to wines with the highest profit margins.

When do they plan to ship over the 2006s?

This question is likely to be less crucial for the 2006 vintage than it is for 2005. Where they is a heavy demand for a vintage en primeur there is always a possibility that the Bordeaux négoce will over sell, either through oversight or possibly occasionally by design. Shipping early is a way of avoiding an excess of orders over supply.