Fine wines, angry investors

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The Independent Online

Concerns about the millions of pounds invested in en primeur wine are growing after the collapse of a London-based fine wine merchant.

Under en primeur, top Bordeaux wines are offered for sale while they are still in barrels. The customer orders and pays for the wine, with delivery coming two years later.

The advantage is that you buy at the cheapest price. The 2005 Bordeaux has been heralded as one of the greatest vintages ever, generating huge demand. In the past few weeks alone, industry sources believe, worldwide en primeur sales of 2005s could have totalled £200m.

But the recent collapse of Mayfair Cellars, the victim of an internal fraud, has highlighted the risks. Customers discovered at the creditors meeting, held by administrators Grant Thornton last month, that their wine, which is still in Bordeaux, was in effect part of Mayfair's assets.

"This means we have given Mayfair an unsecured loan," said one of these buyers.

"Following representations by Mayfair's customers, we are seeking a definitive opinion," said Grant Thornton. "We will also take a commercial and pragmatic view as Mayfair certainly does not have the money to fight a legal challenge over title."

Mayfair is likely an exception, as most UK merchants offering en primeur now take care to establish the customer's ownership. However, with a two-year time lag and a complex supply chain, concerns still remain.

"We in Bordeaux need stricter controls and regulations on who is buying en primeur," said Leigh Claridge, the UK representative of Maison Sichel SA, a leading Bordeaux merchant.

"When an invoice is paid by the UK merchant, and the goods have been sold on, maybe the Bordeaux merchant should receive a list of names and addresses to whom the cases have been sold to, with proof of sale.

"More paperwork I know, but this has got to stop. So many private customers have been caught out with en primeur over the years."