I still say there is something fishy going on with the supply chain of 2019 Bordeaux.

[JimHow]

I'm telling you, I'm going on nothing but anecdotal observations, but something definitely seems amiss.
In our past experience we would have started receiving some of these wines over a year ago.
Obviously, we know that many businesses in many fields have suffered as a result of the pandemic.
There are these crazy labor shortages, the empty new car dealership lots, we even have a shortage in criminal defense lawyers, can you imagine that.
Sherry Lehman appears to be going under, hopefully not the way of Premier Cru and Rare and others, but I gotta tell you, I was incredibly spooked when I walked into that midtown store this past summer and observed what was described in that New York post article.... It was apocalyptic, not in any nouveaux riche concern for the aristocrats of midtown, but how canary-in-a-coal-mine the experience was, I was going to post about it but didn't trust my own observations.
Is Zachy's solvent?
I mean, guys, we've heard concerns about that company as far back as 20 years ago from a certain forensic counterfeit wine expert and BWEer, at least in their auction practices.
A crazy question, I know, but whuzzup__ with this move from Scarsdale after like a million years? Are they okay? why the delay in my 2019 futures? More importantly, why the delay in the RESPONSE to my inquiries about the delays in my 2019 futures?
The inventory of MacArthur's seems a LITTLE better, but not much.
And then there is New Hampshire... Without question, the most honest fine wine distributor of which I am aware... Almost nothing on their shelves, at least 6-12 months after they would normally appear. We should be getting the 2020s by now.... I keep waiting anxiously for reports from my man on I-495, GerryM, like waiting for Godot....
All the talk about containers arriving on such-and-such date, etc., yada, yada, yada...
I think I've heard this before out of the mouth of the dude from Premier Cru....
Historical record (here on BWE, to the skepticism of many) will show I started raising these concerns as far back as 2004, well before the crash of 2008-09, and like a decade before the Premier Cru fiasco.

Seriously, folks....

Is this a post-pandemic blip, or is history repeating itself?

[SF Ed]

I would guess it is supply chain. If it was just one outfit (like Premier Cru), then it sounds fishy. If it is everyone, then its something else. Especially if NH is also not getting them since they have none of the NYC issues.

SF Ed

[JimHow]

I remember my one personal interaction with the dude from Premier Cru.
It would have been in the spring of 2006.
We were in California for the BWE Sonoma 2006 Convention.
Maureen had done a great job organizing, there were 75 attendees for that Saturday night dinner in Sonoma, our second largest total after the 103 attendee BWE NYC '03 convention.
By then Stuart had established his Thursday night dinners, which started in Chicago in 2004.
We had a Thursday night dinner in Sonoma. I remember it very clearly because Mr. Vino brought a 1986 Mouton, my first experience ever with that wine, which I have experienced since maybe 3-4 times. The finish on the 1986 Mouton that Mr. Vino brought that night was the single greatest finish I have ever experienced on a wine, to this date. My taste buds were numb for the rest of the dinner. The 1986 Mouton is one of my top three greatest wine experiences ever.
Anyway....
Earlier that day I was in the new fancy Oakland store of Premier Cru.
What strikes me is how that 2006 Premier Cru store was so eerily similar to what I saw at Sherry Lehman this past summer: The few crazy inaccessible trophy wines on the shelves, and nothing but crap everywhere else.
I forget the BWEers I was with, my apologies.
I remember telling the gal that I was "JimHow from BWE," and I was there to pick up my 1955 Gruaud Larose.
I swear to you... I may have just as well been Barack Obama....
"Oh! You are Jim How! I'll be right back..."
She goes out back, and out she comes with the dude from Premier Cru.
He fondles the old Gruaud bottle and basically starts crapping on it, talking about how flat it was in a tasting they had had.
So incredibly smug, I remember saying to myself, this dude is a dink.
I decide to still buy it, it was like $360, expensive in those days but of course a bargain by today's standards.
All I know is that it was one of Stuart's wines of the night later that night, which is all I cared about.
As for the dude, I distinctly remember saying to myself.... What... an... asshole....
I truly had my doubts about that scoundrel at least two years before I met him.
I have no doubt about the authenticity of the wine he sold me, it was amazing, as verified by Dr. Roberts.
But it was a moment in history when JimHow met the dude from Premier Cru....
He was a dink.
But having said that, I hope he has paid his dues, learned his lessons, and is living some reasonably productive life, having learned some tough lessons.
I had that guy pegged at least two years before I met him.

[Gerry M.]

Fyi, I inquired via email to the NH state liquor commission regarding 2019 Bordeaux arrival and so far crickets.

[PghMike]

So far I've received 2019s from Zachys, wine.com, Michael's (Sarasota Florida), JJ Buckley and Vinfolio.

I still have pending from Zachys, Wine.com, Wally's, JJ and Laguna.

Wallys told me that the issue of getting everything this fall was booking shipping containers as there was a shortage of those, which did seem to be the case. Not sure what the hold ups are now as that issue seems to have eased.

[Chateau Vin]

I second SF Ed. It’s the supply chain issue that I can think of. I have nearly four cases of 2019s, and I received all of them except two splits from Wallys and 2 regulars from Total Wine.

I have seen couple of bottles (think giscours and that stinky la lagune) in Trader Joes. Saw couple of second wines at Costco. My friends in Boston are also on the lookout at NH stores and they have seen only some entry level stuff of the 2019s.They visited wegmans also, but saw only 3 or 4 of 2019s...lynch moussas, haut bergey, haut bages liberal, couple of second wines and that’s it...

I think shipping from across the pond seems to be the problem. Laguna Cellar in CA is also an importer/retailer and I talked to the owner and he said the container prices have gone up. They charged me 2 dollars per bottle extra! I was very pissed, and luckily I had ordered only around 5 or 6 bottles from them...

So I say, hold tight...

[JimHow]

The single biggest word we heard when Premier Cru was crashing was “containers.” Containers were coming in. Wines were on containers. It was just a matter of time, like Godot. I haven’t heard so much talk about “containers” since the crash of 2008 and the era of Rudy, Rare, and the dude from Premier Cru. I’ll tell you, of all the anecdotes, the one that scares me the most is New Hampshire. We should be getting 2020s by now. We have barely no 2019s. Something is up, folks. The Sherry Lehman experience is unsettling, I’m interested in knowing more about what is going on at Zachys.

[Gerry M.]

I have to believe, at least for NH, it is a distribution issue. While Zachy's and Sherry Lehman are retailers whose financial stability may be questioned, NH is run by the state. Also, NH's main supplier is Southern Wine, the largest distributor in the US. If Southern is in trouble then that's a bigger problem.

I believe something is up though. Normally I would have had a response by now from NH.

[JoelD]

I personally think it's a combination of both. Supply chain issues, and untrustworthy retailers. I'll choose to mostly take the high road on here. But I have stories if you want them. If you're bored and curious, I recommend going and reading recent yelp and google reviews. The negative and recent ones in particular.

As far as NH, it's also possible that they didn't buy a lot of 2019's. I'm seeing some of the same with big stores down here.

[Blanquito]

It took a while to happen, but looks like COVID will bring down one of America’s most storied wine merchants. There’s a thread on Berserkers about Sherry-Lehman stiffing folks on futures, doesn’t look good.

Remember this thread?: http://www.bordeauxwineenthusiasts.com/ ... upt#p83958

May 28, 2020 1:56 pm
We all learned a lesson of sorts from Premier Cru about the risks of prearrivals. I for one am buying much less wine at present in part because shipping season is over and there seems a real risk that (many?) wine retailers could go bankrupt before the cool weather returns in late October. If enough consumers think the same way as I and hold off purchasing, it could be self fulfilling prophecy.

I suppose big operations like K&L are in good shape to weather the downturn, but there are so many well-known wine retailers that are actually quite small operations and probably have very thin margins. And in the last year or so, many of these shops have started offering prearrivals for 6 and 12 bottle lots on a scale I’ve not seen before (with most having the asterisk attached warning of possible tariffs changing the final prices). The logic for the wine shop is compelling with these prearrival deals — the customer, not the shop, provides the capital and assumes the risk — but I can imagine many more consumers with real exposure now. Have any wine retailers gone belly up yet?

And of course, these risks are that much greater for futures when you’re waiting 2-3 years for delivery.

[jal]

I don't buy on futures, my last big futures purchase was in the 2000 vintage (OMG almost 25 years ago!). I was upset on seeing wines I had ordered on futures available in other stores on the shelves and not at the retailer from which I purchased. Since then I decided I want to make sure the wine is in stock before paying for it.

Also, whenever I make the mistake of buying something that I believe is in stock and then discover it is on pre-arrival, I cancel the purchase immediately (happened last year with some Agrapart Champagne I ordered from B-21).

Can anyone explain to me their main reason for buying futures and giving money to a retailer 2-3 years in advance? Is it provenance? Is it getting the format you want? Is it a speculation that prices will go up? The delivery risk for me seems so to negate all of the above advantages. Just curious, maybe it's a reason I haven't thought of.

[JimHow]

Indeed, I’ve never bought futures other than a few wines for the 2019 vintage. Some of those very early prices from Zachys seem almost too good to be true.

What especially alerts me to a problem is the lack of champagne in New Hampshire. Here we are in the middle of holiday season and there is not a single bottle of Dom Perignon in the entire system. That is very strange to me in my experience.

[Chateau Vin]

I don't buy on futures, my last big futures purchase was in the 2000 vintage (OMG almost 25 years ago!). I was upset on seeing wines I had ordered on futures available in other stores on the shelves and not at the retailer from which I purchased. Since then I decided I want to make sure the wine is in stock before paying for it.

Also, whenever I make the mistake of buying something that I believe is in stock and then discover it is on pre-arrival, I cancel the purchase immediately (happened last year with some Agrapart Champagne I ordered from B-21).

Can anyone explain to me their main reason for buying futures and giving money to a retailer 2-3 years in advance? Is it provenance? Is it getting the format you want? Is it a speculation that prices will go up? The delivery risk for me seems so to negate all of the above advantages. Just curious, maybe it's a reason I haven't thought of.

For me, jal, I buy prearrivals primarily because of the format I want. Quite often I fly solo, and want certain wines in the smaller format, which are nearly impossible to get later. And pretty much all the “heralded” vintages so far I bought as futures (generally growth properties) had a higher price tag when I saw them on shelves (09, 10, 16). Having said that, not all vintages need to be bought as futures. Some good vintages such 14, 15 come to my mind. But then, 14 seems to have been somewhat overlooked by critics...

Moreover, I don’t buy all of preorders with one retailer. And I buy from reputed ones. My retailers include JJBUCKLEY, K&L and Total Wine (a bit more safe with only 50% down)...

And going forward, I don’t think I will buy prearrivals as much anymore as I have enough wines in the smaller format...

[Chateau Vin]

Indeed, I’ve never bought futures other than a few wines for the 2019 vintage. Some of those very early prices from Zachys seem almost too good to be true.

What especially alerts me to a problem is the lack of champagne in New Hampshire. Here we are in the middle of holiday season and there is not a single bottle of Dom Perignon in the entire system. That is very strange to me in my experience.

On the other side of the story is that the wine prices, especially in the secondary market have gone up steadily over the past years even during pandemic. So demand seems to be there, no? Would that explain non availability of stock in most places? People working from home and having a drink while at it??

[AKR]

I used to analyze credit risk in a prior life, and I don't think buying EP makes any sense in the modern era.

At one point it did, and buyers were 'paid' for the risk they assumed.

Now its all reversed.

========

For those willing to take the risk, the WDC trick of using a shopping portal to buy small lots, in the sure and certain hope that a credit will show up 2+ years later, seems like one of the few ways to at least sort of get something for letting a merchant get access to monies years before delivery.

[JimHow]

There are definitely weird things happening since the pandemic.
Our criminal defense system is in chaos.
Not sure what to make of any of it.

[DavidG]

I used to analyze credit risk in a prior life, and I don't think buying EP makes any sense in the modern era.

At one point it did, and buyers were 'paid' for the risk they assumed.

Now its all reversed.

Agreed. Last time I bought futures was the 2005 vintage. Until the 2019s were offered at what seemed like depressed prices, so I took a gamble there. Now that the financial incentive has been removed, if you don’t buy half bottles or large formats there’s really no reason to buy futures.

As to the location of 2019s, it sounds to me like the shipping issues have created a bottleneck. Though some stores like SL may be going under, I doubt the NH liquor authority is missing its payments.

[jal]

Thanks for the info guys, it is as I thought but I wondered if I was missing something.

I am buying wine directly from France, esp White Burgs, never had much of an issue there, I email the guy, he tells me what he has, I put in an order, he subtracts the VAT from the price and charges shipping and insurance, two weeks later, the wines are in my hand. I don't notice any shipping issue. I imagine some of the problems come from our (in)famous three tier system. Or maybe stores charged the customers but did not purchase the wines hoping prices will drop and are now scrambling a la 1er cru and maybe even Sherry Lehmann.

[stefan]

What is wrong with pre arrivals? Usually you get a good price and always you have free storage of wine that is too young to drink. Sometimes you even eventually get the wine.

[jal]

What is wrong with pre arrivals? Usually you get a good price and always you have free storage of wine that is too young to drink. Sometimes you even eventually get the wine.

I just don't trust the retailers Stefan, they may go bust, they may never receive the wine and keep me stringing. Call me paranoid, Jill definitely does lol

[Blanquito]

Futures are often substantially cheaper than when the wines hit the shelves, even today. I don’t have hard numbers in front of me but my sense is you’re getting 20-25% off when buying Bordeaux as futures, even compared to prices right after the wines first show up. This payoff used to be (a lot?) better before the 2005 vintage though and it doesn’t pan out in every vintage, though even “missed” vintages like 02 and 14 were appreciably cheaper as futures.

I do think Parker‘s influence made futures a better deal in the past, probably because he was conservative with his barrel scores so when he rated the wines in bottle there was often a big jump in scores and prices. We don’t see that singular market-setting influence anymore, but even the overprice 2005 futures jumped quite a bit on average after Parker released his in bottle scores.

The financial question of course if these discounts are big enough to justify the risk, which is hard to say. In practice, haven’t the overwhelming majority of people over time eventually received their Bordeaux futures, indicating that, despite the headlines, the risk in practice is/was very low?

That all said, I do think we’re making a mistake seeing futures as a rational exercise. The new vintage gets relentlessly hyped by the wine makers and the wine critics, we hear the beating drum over and over again, our friends attend the UGC and report back glowing notes, influencers show pics of themselves draped longingly over an Imperial of the 2019 Petrus, Jeff Leve tells us once again that the Bordelais have never made better wine than now-now-now (and he may be right! Why risk missing out!?!), threads on wines still in barrel get hundreds of posts in just hours while detailed posts on fully mature wines barely get a look, et cetera. And there’s no deferred gratification required, these wines are for sale, baby! And at a discount! Come get your piece of history, before it’s gone!

[Blanquito]

What is wrong with pre arrivals? Usually you get a good price and always you have free storage of wine that is too young to drink. Sometimes you even eventually get the wine.

This was Premier Cru’s official motto, right?

It sounded better in Latin.

[Chateau Vin]

I used to analyze credit risk in a prior life, and I don't think buying EP makes any sense in the modern era.

At one point it did, and buyers were 'paid' for the risk they assumed.

Now its all reversed.

========

For those willing to take the risk, the WDC trick of using a shopping portal to buy small lots, in the sure and certain hope that a credit will show up 2+ years later, seems like one of the few ways to at least sort of get something for letting a merchant get access to monies years before delivery.

I get what you are saying about prudence in buying futures, Arv. But wondering if it’s worth refraining buying futures because of higher prices later or because of the risk involved of not getting the orders. If it’s the latter, then I get it and we can just quibble about how much risk is involved and how much is too much risk.

But increased prices after they hit the shelves is a real thing (for my purchases so far and I suspect for almost all growth properties), and almost all future purchases I have done so far until 2016 vintage are lower than when they hit the shelves. The increase ranged from 10% to almost 30%... Only one wine, from 2019 vintage, Marquis Alesme stayed the same price (from future price till it hit the shelves recently).

I also think there will be more demand for Bordeaux and the prices will only increase. Once the Chinese market comes of age, I think they will only increase demand even more for the growth properties. With all the inflation in the past few months, the bordelaise haven’t even priced that in yet.

In my previous post I mentioned about Laguna Cellar charging me 2 dollars per bottle extra. I was pissed, but they said that the container shipping has become more expensive. They coolly said, “if you don’t want to pay the extra, we can cancel the futures order and refund the amount”. I guess they think they can easily sell it back in the market for a markup...And sure enough, the cheapest price on Wine-Searcher for those wines was around 10 bucks higher than what I paid. So coughed up extra 2 bucks, and luckily it was only 6 bottles. Needless to say, I won’t be doing any business with them unless it’s about in-stock wines...

[DavidG]

Futures are often substantially cheaper than when the wines hit the shelves, even today. I don’t have hard numbers in front of me but my sense is you’re getting 20-25% off when buying Bordeaux as futures, even compared to prices right after the wines first show up.

I wish this were so, but it has not been my experience with anything I’ve purchased post 2005 (other than 2019). Maybe I’m buying from the wrong places.

[JCNorthway]

It seems to me that 2019 may be the exception of recent years. Due to the pandemic, I suspect wineries were reticent to push prices for fear of people not buying. As a result, the few "smaller" 2019 wines I bought on futures are 30-40% above what I paid. And the Pontet Canet is over 50% above the futures price - actually over 75% for many retailers. I don't expect to see those futures prices again unless the global economy takes a serious hit.

[JimHow]

Wines like Calon Segur, Lynch Bages, Rauzan Segla, Leoville Barton, were going for like $75-90 in the early days of the pre arrival campaign. It was downright reminiscent of the olden days of Premier Cru, Rare, etc. Oh, wait....

[PghMike]

Confirmed my 2019 Laguna bottles are in and the rest of the wine.com also. Just a little left at Zachys and a fair amount at Wally's. I've received about 3/4 of my total orders now. It does seem like there was a real container shortage in the fall and that hole is now finally being resolved. I was able to achieve even lower than EP release prices for alot of these getting $50 back per order on wine.com especially but also using Amex and gift card deals. If only I had dove into the first growths....

Ive been buying some 2020s now from wine.com due to the immense cash back that is netting me some prices similar to 2019 releases, but had mostly held off prior to the deals as it seems like there are few to no drivers to cause a price increase once they hit the shelves.

From the research I've done it seems there are few vintages post 2000s where futures have been a measurable discount but obviously specific wines have increased significantly such as 2015 Margaux or even 2015 Canon (at least on a % basis).

I plan to continue to buy where it is clear there is quality and a significant discount is likely to be achieved. I am also happy to have waited on 2020 until closer to the potential delivery date versus immediately upon release in order to reduce risk of an insolvent vendor and increase probability that I could claw back cash from the credit card company if needed. I don't see myself buying 21s unless there are some major deals next year on the high end labels.

[AKR]

In my previous post I mentioned about Laguna Cellar charging me 2 dollars per bottle extra. I was pissed, but they said that the container shipping has become more expensive. They coolly said, “if you don’t want to pay the extra, we can cancel the futures order and refund the amount”. I guess they think they can easily sell it back in the market for a markup...And sure enough, the cheapest price on Wine-Searcher for those wines was around 10 bucks higher than what I paid. So coughed up extra 2 bucks, and luckily it was only 6 bottles. Needless to say, I won’t be doing any business with them unless it’s about in-stock wines...

That's the whole nut of the problem - if the 'trade' works the way one hopes, the 'contract' is so ill defined and one sided that the merchants can pull tricks like this. I tend to stay away from these kinds of agreements, when they are discretionary.

[Gerry M.]

Fyi, I inquired via email to the NH state liquor commission regarding 2019 Bordeaux arrival and so far crickets.

Jim, I just received this response from the NHSLC today from a Danielle Daley, a "information rep":

"All of our 2019 Bordeaux were released earlier this year"

I responded that it couldn't possibly be true but if so then myself and many others cannot count on NH to be a reliable source for Bordeaux in the future.

[JimHow]

Wow that's crazy Gerry!
I still say there's something fishy going on.

[DavidG]

Wait, what?!? All the NH 2019 Bordeaux came and went without you guys noticing? Something’s rotten in Concord…

[Chateau Vin]

Maybe NH barely bought any 19 Bdx, and pandemic times might have played a role in that...

[DavidG]

Interesting thought CV. My recollection is that liquor stores did land order business early in the pandemic. But I can see uncertainty leading to a limited offering.

[William P]

There must be some kind of way outta here
Said the joker to the thief
There's too much confusion
I can't get no relief
Business men, they drink my wine
Plowmen dig my earth
None will level on the line
Nobody offered his word

[Chateau Vin]

Interesting thought CV. My recollection is that liquor stores did land order business early in the pandemic. But I can see uncertainty leading to a limited offering.

Also the 19 vintage was marred by that uncertainty about that tariff fight, and that might have contributed to NH placing fewer orders of 19 vintage.

My friends in Boston used check regularly for 19 Bordeaux at NH outlets, but nada. It looks like, NH might have placed orders for very few 19 Bordeaux...Either way, something is amiss...

[Blanquito]

More grim news on Sherry-Lehmann, sounds like gross mismanagement at best and outright fraud at worst: https://nypost.com/2022/12/15/sherry-le ... ts-waited/

[marcs]

More grim news on Sherry-Lehmann, sounds like gross mismanagement at best and outright fraud at worst: https://nypost.com/2022/12/15/sherry-le ... ts-waited/

In one sense this article is grim in another sense it’s hilarious (especially if you’re not a customer of the store) and I encourage everyone to read it. The responses from Sherry-Lehman to the accusations are fantastic — YES we party with your wines, NO we don’t regret it, YES we are just that entitled and awesome.

I caught myself thinking that their CEO was truly living the dream. Maybe even more than the Acker guy.

[JimHow]

Maybe NH barely bought any 19 Bdx, and pandemic times might have played a role in that...

That may be the case, CV. That would be a radical departure from past NH practice, a system that has consistently offered large quantities of a huge range of Bordeaux, from top estates to bottom, usually at competitive tax free prices and sometimes at best in nation prices.

Also of alarming note is the lack of champagne. Where is all the Dom Perignon? Something strange is going on.

And I’m not an expert on Zachys but something doesn’t feel quite right there either.

[JimHow]

Looks like they got Pol Roger NV in stock, Gerry, but at $63? Good grief.

[Tom In DC]

Did NH typically buy in France during the first releases? Maybe their buyers couldn't get there, much like BWE'ers at the time?