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1855.com says delivery failure due to economic situation, UGC investigates

Bordeaux merchant 1855.com, which is being sued for failure to deliver paid-for wines, says its problems are due to the general economic downturn.

The chief operating officer of 1855.com has praised clients – whom he has charged not only for the wine but also delivery and tax – for their patience while his company ‘unlocks’ wines from suppliers.

Meanwhile the Union des Grands Crus de Bordeaux (UGC) has become involved, saying it is concerned at reports that 1855.com is failing to deliver some en primeur orders.

Sylvie Cazes, president of the UGC, told Decanter.com there has been a number of complaints from members, which were being investigated.

‘We are actually very conscious that there has been a problem and are concerned about following this. We have been investigating the matter over the past few months. We received a number of reports of problems with 1855.com from our members.’

COO Fabien Hyon told Decanter.com he expected it would ‘take time’ to fulfil orders as the company was having difficulty paying its suppliers.

‘If a company is sized for strong growth and a €50m revenue stream, but the reality is a lower-than-expected growth due to the economic environment, this company loses money.

‘Then it faces difficulties processing the remaining payments on time. Therefore, wines that are not totally paid are not delivered by our suppliers.’

‘It takes time to rebuild profitability, financial capacity and confidence to be able to “unlock” these wines and deliver them to our clients that are waiting — patiently in most cases.

‘Outstanding deliveries are now down to 5%. Which is still too much. Until every single case is resolved, we are working on answering and following any single client case.’

The tally of en primeur wines known not to have been delivered has now risen to over 124 cases with a current value of approximately €108,000.

This includes cases of the 2005, 06 and 07 vintages, all of which have been paid for by clients. 1855.com has also charged its clients for transport and VAT on these wines.

Complaints have come from Belgium, France, Finland, Germany, Greece, Portugal and the UK.

There are numerous cases of 1855 clients taking legal action against the company. On Thursday 13 January in one Paris small claims court there were five cases against 1855 out of the 35 cases to be heard. One of the plaintiffs will be back at the same court in February looking for judgment on three cases of 2002, one of them Château Lynch Bages.

On 7 September 2010 the Tribunal d’Instance de Paris (the district court) ruled that 1855’s problems were of its own making as they had not bought the wines when customers placed their orders. 1855 were ordered to pay €24,975 and their customer’s legal expenses.

As for the current, stellar and super-expensive Bordeaux 2009 vintage, 1855.com has posted an assurance that all orders will be fulfilled.

In the forum on boursorama.com, it says ‘Financial security is number one in this market. 1855 does not practice “short selling”. All the Bordeaux 2009 futures [that the company will sell] have been bought by 1855.’

Written by Jim Budd

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