Premier Cru Master Complaint Thread (MERGED)

[Lewis_Dawson]

Andrew, what do you know about their payment terms? Do you think they don’t pay for purchases until after the wines are delivered? Do you think their Bdx futures bought require no payment? And how do their outstanding orders relate to normal release dates, as a percentage of annual sales? Frankly, your description of a classic ponzi scheme is not really excused IMO by your “hypothetical” disclaimer.

PC sells many rare, hard-to-find wines as prearrivals, and they tend to offer them months before many 3-tier retailers do. So of course that order is going to be “pending” for a while. But almost all the time, it will be delivered relatively timely.

And sometimes it takes a long time, much longer than we want, but that is not the norm, that is the exception to the rule, and usually explained by their supplier shorting them on a contract.

[Andrew_L]

@Lewis Dawson

Andrew, what do you know about their payment terms? Do you think they don’t pay for purchases until after the wines are delivered? Do you think their Bdx futures bought require no payment? And how do their outstanding orders relate to normal release dates, as a percentage of annual sales? Frankly, your description of a classic ponzi scheme is not really excused IMO by your “hypothetical” disclaimer.

PC sells many rare, hard-to-find wines as prearrivals, and they tend to offer them months before many 3-tier retailers do. So of course that order is going to be “pending” for a while. But almost all the time, it will be delivered relatively timely.

And sometimes it takes a long time, much longer than we want, but that is not the norm, that is the exception to the rule, and usually explained by their supplier shorting them on a contract.

Did you not read my post? I DON’T know any inside details of their operations. My post is 100% hypothetical. Under the scenario I described, the futures would not be bought in advance, and they would be hoping they can cover on the open market when it comes time to deliver the product to the customer. In periods of rising prices, they cannot cover in the open market without taking a loss, which would require them to extend arrival times by delaying the purchases, or offering more orders to new customers to generate proceeds to purchase the bottles at a loss from the original offer. I’m not accusing them of anything. I was simply offering a totally fictional scenario in response to your post. In all future posts, I will refer to the fictional company in my posts as “Inferior Cru” to avoid confusion. If anyone takes my hypothetical posts as gospel, they are a moron, as I have stated several times that I don’t know how the company actually operates.

[Markus_S]

@Howard Cooper

@Markus S

@Howard Cooper

… Even when CW got into trouble with not being able to deliver on 1990 Bordeaux, it was not because they were gambling. It was because their source went bankrupt.

Actually, it was a container ship that split in half at sea which CW had the unfortunate luck of having the majority of their Bordeaux on it in containers that sank to the bottom of the sea. But they made good on every order.

No, they didn’t. We ordered a case of Montrose and only got 2 bottles.

Yes, but you got your money back? Unlike the poor ‘customers’ of Carolina Wine.

[Jonathan_Loesberg]

@Markus S

@Howard Cooper

@Markus S

Actually, it was a container ship that split in half at sea which CW had the unfortunate luck of having the majority of their Bordeaux on it in containers that sank to the bottom of the sea. But they made good on every order.

No, they didn’t. We ordered a case of Montrose and only got 2 bottles.

Yes, but you got your money back? Unlike the poor ‘customers’ of Carolina Wine.

Either money back or money + 10or 20% (I forget)if one took the value in wine. The upshot is that I got two bottles of 90 Montrose and a case of 89 for my future purchase. In retrospect, having tasted both wines, I probably came out ahead, for my taste. In any case, I thought they acted very honorably.

[Howard_Cooper]

@Jonathan Loesberg

@Markus S

@Howard Cooper

No, they didn’t. We ordered a case of Montrose and only got 2 bottles.

Yes, but you got your money back? Unlike the poor ‘customers’ of Carolina Wine.

Either money back or money + 10or 20% (I forget)if one took the value in wine. The upshot is that I got two bottles of 90 Montrose and a case of 89 for my future purchase. In retrospect, having tasted both wines, I probably came out ahead, for my taste. In any case, I thought they acted very honorably.

They did what they did. I got money back + something if you took the value in wine. But, it was substantially less than the FMV of the 90 Montrose at the time. I have bought from CW since then, but not futures.

[Frank_Drew]

@Markus S

Actually, it was a container ship that split in half at sea which CW had the unfortunate luck of having the majority of their Bordeaux on it in containers that sank to the bottom of the sea. But they made good on every order.

I lost a half case of Pingus’ second wine (the 1995? 1996?) when a container ship broke apart in the Atlantic, so that was mid-to-late 90s. Was there an earlier, similar shipwreck?

[Howard_Cooper]

@Frank Drew

@Markus S

Actually, it was a container ship that split in half at sea which CW had the unfortunate luck of having the majority of their Bordeaux on it in containers that sank to the bottom of the sea. But they made good on every order.

I lost a half case of Pingus’ second wine (the 1995? 1996?) when a container ship broke apart in the Atlantic, so that was mid-to-late 90s. Was there an earlier, similar shipwreck?

I don’t think so. As I said before, the issue was a bankrupt supplier. http://www.highbeam.com/doc/1P2-961088.html

[Lewis_Dawson]

Here is my recollection of the Calvert-Woodley scenario, which could be wrong…

1. C/W decided to go very light on 1990 Bdx futures. Remember, at this point in sprig/summer/fall of 1991, RP was still saying that 1989 was the year to buy with a few exceptions.
2. Then 1990 ignited. And RP upgraded his opinion of 1990’s. Or maybe reverse order.
3. C/W secured a lot of 1990 futures from Rare Wine LLC (not associated in any way with Rare Wine Co.) because Rare Wine LLC had over-bought 1990 futures.
4. Rare Wine LLC did not make its progress paynebts on the futures contracts it held, and indeed went bancrupt, stiffing C/W as well as its own consumer-level customers. IIRC, cocaine was involved.
5. So C/W had sold Bdx futures, but lost the wine supply. I’m not all that familiar with how they worked it out, but I thought most wines they had sold were sourced elsewhere and delivered to customers, but a few were not as the price escalation was just too steep. Montrose 1990 was one, and I’m sure there were others.
   C/W did take a lot of wine from Rare, non-Bordeaux wine. I remember buying some Chablis Les Clos at a ridiculously low price.
6. Sunked ships were not involved, I’m pretty sure. Unless you consider running the family business broke and winding up in prison to be the same as a shipwreck, because that is what happened to the Rare Wine LLC guy.

FWIW, I bought early and heavy in 1990 Bdx futures across town at MacArthurs, and many of my prices paid were about half to two-thirds what RP published as his prices paid, when he wrote about that a couple years ago. So if you want Bdx advice, who ya gonna ask…??? Those Bdx wines, which I fully intended to drink, wound up financing much of my Burg cellar.

[Carl_Steefel]

It is a mystery to me why the topic of bankruptcy keeps coming up when discussing Premier Cru. They are a long way from this state, so the discussion seems irrelevant to me, and does not get at the reason(s) for lateness of delivery.

[Steve_Manzi]

LEAVE PREMIERE CRU ALONE!!!

- YouTube

[Markus_S]

@Lewis Dawson

6. Sunked ships were not involved, I’m pretty sure. Unless you consider running the family business broke and winding up in prison to be the same as a shipwreck, because that is what happened to the Rare Wine LLC guy.

Okay, I guess my recollection was cloudy. The sunk ship was more of a mid-90’s thing like Frank said.

Those Bdx wines, which I fully intended to drink, wound up financing much of my Burg cellar.

Justice indeed!

[Frank_Drew]

@Lewis Dawson

Here is my recollection of the Calvert-Woodley scenario, which could be wrong…
3. C/W secured a lot of 1990 futures from Rare Wine LLC (not associated in any way with Rare Wine Co.) because Rare Wine LLC had over-bought 1990 futures.
4. Rare Wine LLC did not make its progress payments on the futures contracts it held, and indeed went bankrupt, stiffing C/W as well as its own consumer-level customers.

Rare Wine LLC? Were there two Rare Wine LLC meltdowns, because the one I’ve heard of (the Colorado company run by Ron Wallace) took place in the early 2000s, not the early 1990s (when Calvert Woodley had it’s problem); it did involve undelivered Bordeaux futures, but not from the 1990 vintage.

[Dav1dZ]

The abyssal plain of the Atlantic must be littered with the broken hulls of container after container, the muddy seafloor strewn with bottles of the finest wine. What a treasure trove for the intrepid oceanographer!

[Lewis_Dawson]

@Frank Drew

@Lewis Dawson

Here is my recollection of the Calvert-Woodley scenario, which could be wrong…
3. C/W secured a lot of 1990 futures from Rare Wine LLC (not associated in any way with Rare Wine Co.) because Rare Wine LLC had over-bought 1990 futures.
4. Rare Wine LLC did not make its progress payments on the futures contracts it held, and indeed went bankrupt, stiffing C/W as well as its own consumer-level customers.

Rare Wine LLC? Were there two Rare Wine LLC meltdowns, because the one I’ve heard of (the Colorado company run by Ron Wallace) took place in the early 2000s, not the early 1990s (when Calvert Woodley had it’s problem); it did involve undelivered Bordeaux futures, but not from the 1990 vintage.

Frank, I cannot vouch for my accuracy, it is possible that I confused the two scenarios. I am pretty sure Calvert-Woodley was late to commit to 1990 and bought their “futures” not in Bordeaux, but from a US source, who ultimately failed to deliver. I can’t say it was Wallace, however. Sotty, my bad, it seems.

[Dav1dZ]

@Carl Steefel

It is a mystery to me why the topic of bankruptcy keeps coming up when discussing Premier Cru. They are a long way from this state, so the discussion seems irrelevant to me, and does not get at the reason(s) for lateness of delivery.

Because if PC files for bankruptcy while you are waiting for futures, you are an unsecured claimant and getting pennies on the dollar. The longer the wait, the more risk.

[Andrew_L]

Slow down Zylberberg…you aren’t allowed to discuss negative hypothetical situations in here!

[anthonyshideler]

I’m waiting on over $80k worth of wine purchased in 2011, mostly 2010 Bordeaux. John Fox has made over a dozen promises during that time of arrival times that have not come through. We’ve had to pay him a personal visit to express the severity of this situation and possible repercussions. Not sure about the folks on here defending him, but there’s a reason people in the business do not purchase presale wines from this guy anymore. Scratch a lie, find a thief.

[Mel_Hill]

[Scott_G_r_u_n_e_r]

Welcome to the board Anthony!

[anthonyshideler]

Thanks Scott, glad to join in the conversation.