Wines that are ‘in bond’ are those which have not had VAT or Duty paid on them. As such they cannot be delivered for consumption without paying the relevant duty and taxes, they must stay within designated warehouses.
Tips on Buying and Selling Wine in Bond
A popular way of buying and storing wine is to purchase it while it’s “in bond”. This simply means that your wine is stored in a HM Customs & Excise-approved “bonded” warehouse. Wine purchased and stored in this way is not Duty or VAT payable until it is taken out, or delivered to your home – at this point the VAT is payable on the original purchase value.
The advantage of using a bonded warehouse is that for a fee, of around £15 a year, the warehouse will ensure your wine is kept safe in cellar conditions and at a regular temperature to guarantee its provenance. This said wine doesn’t always arrive in good condition. Many bottles suffer problems associated with ageing outside of these stable environments. “In bond” wines can suffer “ullage” (a lowering of the level within the bottle); seepage or label damage, so we would recommend that you request a photo of your purchase before agreeing to paying for it. One problem we encounter with less reliable wine companies is that many sell damaged cases for the price of pristine ones, and depressingly often, this is at an inflated price too. Often when the buyer comes to realise the ruse, it is too late and the company has vanished into liquidation.
Things to be Cautious of
Knowing the condition of your wine and its transit history can be difficult to fathom when wine is in bond. It’s a danger associated with never actually clapping eyes on your cases before buying them. It’s possible that you have been sold a case of wine that has already been around the world (America and China are the most common markets). If your wine has travelled to and from the US, it is likely that your bottles will have export labels stuck to them. As a rule of thumb, attaching these will reduce the value of your wine by 20 per cent.
Avoid the ugly surprise and don’t buy wines without having seen a photo of the stock (some merchants will provide a photo for free but we think the £8 fee is a small price to pay to know you’re buying quality stock).
The London Wine Cellar stores at London City Bond
At The London Wine Cellar we store our holdings in the warehouses of our trusted logistics partner, London City Bond. The majority of our stock is held within the Vinothèque warehouse in Staffordshire. Client’s, who already store their wine within this facility, can take advantage of an upfront payment of 50% when selling to us, as it is a simple matter of transferring ownership.
For clients with wine stored in bonds elsewhere, payment is processed in full once the stock has been received and inspected. London City Bond carries out an independent inspection (condition report) on our behalf prior to payment. If anything untoward is discovered, meaning a price alteration is necessary, our clients are under no obligation to sell and we will return the goods promptly and at our cost.