Two other instances of wine-merchant insolvency, now the subject of legal action, will further undermine confidence in the trade's ability to protect wines paid for by customers.
Last August, the Hungerford Wine Co collapsed, leaving 14,000 customers in the lurch. Hungerford specialised in selling claret en primeur. This is the as yet unbottled wine of the latest vintage, paid for at a discount rate for delivery when bottled. The business had thrived on the fat vintages in the Eighties. But with three lean vintages compounded by recession, Hungerford went into liquidation.
Despite guarantees that its wines were safe in director Nicholas Davies's hands, customers are having to contest ownership, because most of the pounds 1m of wines were not labelled with customers' names. To complicate matters, Hungerford failed to pay for the 1990 and 1991 wines it acquired for customers en primeur.
In early 1993, Mr Davies started the Claret Club, a subscription scheme based on the mailing list of the Hungerford Wine Co and operating from its premises. Eleven days before Hungerford went out of business, Mr Davies wrote to me: 'I was most upset that the Claret Club was not mentioned as a stockist for red bordeaux. Is this little town of Hungerford disappearing from the map just because we are trying to provide customers with a better service overall?'
Better service was not extended to a host of disaffected customers by Nigel Baring, the man behind the London Wine Co (not connected with London Wine Ltd of Chelsea Wharf), which crashed in 1975 leaving customers 12,000 cases adrift. Mr Baring popped up again in the Eighties as an en primeur specialist. In the past couple of years, he bought three ailing wine merchants: Chaplin & Co of Worthing; Ellis, Son & Vidler of Lewes; and Stapylton Fletcher of Maidstone. All are now insolvent or inactive.
Mr Baring removed more than 2,000 cases from Ellis, Son & Vidler's warehouse to his own cellars. He insists he did so in the interests of customers. None the less, the receiver, Nigel Vooght of Coopers & Lybrand, acting for NatWest, needed a court order to get Mr Baring to deliver up those wines to his control. Coutts, in particular, was less than amused to see its port being impounded.
Meanwhile, John Rubinstein, the solicitor acting for a group of 70 Ellis, Son & Vidler customers, is optimistic that his clients will recover their wines - a claim which is to be heard in court in the near future.
At the end of last year, Mr Baring's own company, Nigel Baring & Co, was wound up, leaving more than 600 customers without wines for which they had paid from pounds 100 to pounds 50,000. Nicholas Porritt, a Lloyds underwriter and customer for wine worth pounds 2,270, has formed a lobby group of 90 customers, but is not optimistic about the chances of recovering their wines.
This month, the resilient Mr Baring has written to a wine merchant, saying he plans to launch a venture 'along the lines of Nick Davies's original Claret Club', adding: 'I plan to involve Nick Davies for his knowledge of marketing, wine and computer systems'. Mr Porritt declares himself 'absolutely incensed' by this news.
Simon Loftus, a director of Adnams, the Southwold wine merchant, is also appalled: 'While customers sit around without the wines they've paid for, it seems at least flagrantly callous to start another business. The wider implications of the latest spate of insolvencies suggest that we need to put in place security systems so that customers can survive a possible liquidation.'
Having researched the legal questions involved in wine storage, Octavian, a specialist wine services company, has concluded that the solution lies in the identification of goods and their physical separation in storage. These are the main features of its service, plus insurance to replacement value and the opportunity for customers to inspect their goods.
Meanwhile, Adnams last year joined with Lay & Wheeler, John Armit Wines, Laytons, Tanners and Yapp Bros to form a group called the Bunch, with the object of 'setting standards which are the best achievable, not the minimum we can get away with'. As part of a code of practice designed to protect customers' reserves, each merchant guarantees that customers' wines are stored separately, properly identified and insured (but only to the value of the original purchase price).
Clearly, such features should now be adopted by the wine trade as a whole as the minimum basis for wine storage. The thorny problem remains, however, of wines bought en primeur from a merchant who subsequently goes out of business.
Members of the Bunch are looking at bank guarantees and discussing an insurance-bond scheme with a number of chateaux and negociants in Bordeaux. If 1994 should turn out to be a vintage worth buying en primeur, it will be imperative for the trade to have tighter safeguards in place to prevent any further own goals.Reuse content