Premier Cru - you be the judge!

[stefan]

I have not seen a shred of evidence that PC offers wine that it has not sourced. When prices were rising, it would have been incredibly risky to do that. Who would run a business that way?

stefan

[DavidG]

Well, there's the rub. Is that huge amount of non-delivered wine a positive (free storage and reliable delivery, eventually) or a negative (exposure to risk of non-delivery)?

As a corollary to Stefan's comment, with prices generally lower the past year, PC might be in a better financial position right now if they did take orders prior to paying for wines. But how would they have worked that for all those years of rising markets? 20+ years would be an awfully long run for a Ponzi scheme. It just doesn't make sense to me.

I have not seen any evidence that PC offers wine it has not sourced. But can anyone offer another logical explanation for the long delays, other than shipping consolidation or not paying their bills? Maybe shipping consolidation and payment delays explain it all. Maybe they have long-term deals that allow them to pay their sources later than anyone else, but that sure doesn't seem likely.

[SF Ed]

PC considers wine to be sourced when they think they can get it, not necessarily with firm orders. I have very little wine outstanding with them now, but just followed up on some 2005 BDX. On Sociando Mallet, they said they had it sourced but it just hadn't made it over yet. On some Leoville Barton magnums, they said they don't have it sourced. So they do take orders without firm sources or their firm sources end up being not so firm.

In my many years of dealing with them, they have sourced 99% of what I have ordered in the end. I won't be opening any magnums of 2005 Leoville Barton anytime soon, so I am not too worried. But I completely understand anyone who wouldn't order pre-arrival from them as well. They take forever to deliver and you have to be proactive. And in the end there might be bottles they don't deliver. But I have experienced that with 3 bottles out of at least 1000 ordered, so in my mind their track record is pretty good.

[SteveH]

Those first four undelivered listings are freakin' huge, and of course many more bottles would remain unposted on cellar tracker by people like me, who wouldn't think about posting late delivery of ' 06 futures. As I said before, it's customary for P.C. to deliver very, very late, but they have always delivered. I'd be more concerned if I had bought from a small merchant who himself may have been screwed by the wholesaler or the importer.

[DavidG]

Thanks for the input Ed. Good to see you posting...

Based on your conversation with them, it doesn't sound like PC is being secretive or even hesitant about disclosing their practice of taking money before having commitments, at least for some wines. That's what I've always assumed was the case. I've never had a single bottle go undelivered from them. I still remain pretty confident that that they will eventually deliver my '05 Bdx.

[William P]

Here's the problem I have with the whole get money before you source the wine argument. How do they know what to advertise for sale. Do they say gee we haven't had a Vogue Bonnes Mare 1996 in ages, let's sell a dozen and then source it in Europe. It makes no sense, especially if you multiple that by 20 or 30 wines being advertised.

This if from PC's website:

The term "Pre-Arrival" is applied to wines that we have purchased that have not arrived yet. Depending on the particular wine, the arrival time can be anywhere between 30 days to over two years (in the case of Bordeaux Futures, for example). The most common scenario would be this: A wine is purchased from an overseas supplier. The supplier then delivers the wine to one of our overseas warehouses, usually within 2-8 weeks. The wine is then consolidated with other wines to fill a refrigerated container, which usually takes 2-4 weeks. The container is then shipped to us, arriving in the Port of Oakland, which takes another 3-4 weeks. Add another 2-3 weeks for the inevitable delay along the supply chain just to be safe. In this example, which is the most common, the time it takes for the wine to get to us after we have purchased it is approximately 3 to 6 months. Many upcoming new releases of highly desirable and sought after limited-production Burgundies, Rhones, Germans, Italians, etc. are offered on a "Pre-Arrival" basis by our suppliers as well. These offerings will take even longer to arrive, generally 6 to 18 months, but are often the only way to assure that you will actually get the wines. If you would like to find out an approximate delivery time for a partcular wine, please email us at sales@premiercru.net or call us at 510-655-6691.

[William P]

So is it not fraud to advertise on your website that pre-arrival equates to purchased wine that has not yet arrived, if, they haven't purchased it yet? In my opinion, a practice like this could be considered and unfair business practice under CAlifornia's Business and Professions Code.

[Tom In DC]

Bill,

I didn't see the data as negative. Quite the contrary, I'd guess that the 40,000 bottles or so across the Premier Cru, PC, and PremierCru entries represents a huge amount of trust on the part of CellarTracker's share of the "internet-savvy wine buying community". As SteveH said, I wouldn't be surprised if that 40,000 bottles represented only a small percentage of their outstanding orders.

And as these numbers were gathered soon after the spring shipping season and in the midst of a recession, that 40k may also be on the low side historically.

Ciao,
Tom

[William P]

Then I apologize Tom for misinterpreting you post.

[DavidG]

So is it not fraud to advertise on your website that pre-arrival equates to purchased wine that has not yet arrived, if, they haven't purchased it yet? In my opinion, a practice like this could be considered and unfair business practice under CAlifornia's Business and Professions Code.

I wouldn't know, I'm not a lawyer and don't know anything about that part of the law. Maybe it's just false advertising? Is that the same as fraud? "Could be considered" doesn't usually result in a criminal action if no one is getting hurt and there's no political hay to be made.

The quote from the PC website sure doesn't match with what SF Ed just reported.

PC's explanation about it taking up to 18 months to get their hands on highly allocated items seems to make no sense when it comes to Bdx futures either. Most of those wines aren't hard to get. You put in your order, you pay, and you get the wine 2.5-3 years after the harvest - some in the spring and some in the fall. But it's now almost 4 years after the harvest and everyone has the wine... except PC customers. Hard to imagine that the '05 Bdx were secured back in the spring of '06, when most of the futures were offered. Then again, there's lots I don't know about the wine biz. For all I know, they might be putting down a smaller deposit than most in return for going to the back of the line on delivery.

I don't mind waiting an extra year so long as I eventually get the wine in good shape, which has been the case every time so far, but the reality just doesn't jibe with what they have on their website.

[SteveH]

I can understand that a lot of customers who are still waiting for their wines have become more and more anxious with the passage of time. In the past year we've seen Lehman Bros., Bear Stearns, Fanny, Freddie and others go down the drain. My own employer of 22 years, Citi, was within minutes of biting the dust in January. My stock has gone from 57 to 3 in a year and a half. My Smith Barney division just merged this month with a much stronger company. Many of us have been through hell and back. We've experienced a lifetime of stress in one year. Good wines are expensive these days and many people have prepaid lots of money for bottles they haven't seen yet. Their concern is palpable. Maybe for next vintage those folks should buy off the shelf on release, pay a higher price, and spare themselves this agony.

I have no dog in this fight, but I will say again that all my dealings with P.C. have ended well.

Steve - The Wine Shrink

[William P]

Sorry, I got my 03s and 95% of my 05s. So I don't know to whom you refer.

[William P]

Well Dan, I am not a cellartracker member so I don't explore the site. Thanks for bring this to the attention of the board.