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What does ‘in bond’ mean? – ask Decanter

Seen wine prices listed as 'in bond'? Here's what it means...

Wines that are sold ‘in bond’ have not had the duty and VAT – also known as sales tax – paid on them. This is a particularly common way to buy wine for investment, and is also used for wine that is purchased en primeur.

Why would you buy ‘in bond’?

Investment is one reason to buy in bond; you can’t do much about the state of the fine wine market, but you can look after your wine.

‘Fine wine matures once bottled and improves with age,’ said Simon Staples, speaking to Decanter.com in 2018 when he was Fine Wine Sales Director, at Berry Bros & Rudd. He is now director of private clients for Lay & Wheeler.

‘A limited amount is produced every year and as bottles are consumed the supply of the wine becomes smaller.

‘As supply diminishes, demand generally rises as the wine matures. If looked after properly in a temperature, humidity controlled bonded warehouse, your investment will mature slowly over 10 to 30 years.’

Justin Gibbs, Liv-Ex sales director, added, ‘If you sell them later on, you never pay duty or VAT on the wines. This also makes them more attractive to potential investor buyers.’

More about wine storage

Wines in bond must be stored in an authorised bonded warehouse.

‘If a wine has been stored in bond, it is more likely to have been stored correctly, and not in the cupboard under somebody’s stairs,’ said Gibbs. ‘For example, Liv-ex’s warehouse is monitored 24/7.’

When can you actually get the wines?

It depends if you are buying en primeur, also known as on pre-release or futures; before the wines have been bottled.

‘Wines can only be purchased by the unmixed case and are usually delivered two to three years after the vintage,’ said Staples.

‘If you have purchased the wine from a stock-holding merchant, who already has the wines in their own warehouse, you should be able to get them quite quickly (normally within two weeks),’ said Gibbs.

‘If a merchant is purchasing them from elsewhere on your behalf, you may have slightly longer to wait.’

Originally published in 2018 and updated in 2021. 

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