... what does the term "in bond" mean? I read this all the time in Decanter, mostly, but not exclusively, concerning Bordelais wines - and, apparently, always in lots of 12. I would guess that it ahs something to do with primeur deals, wine that is not immeditaely available, and, perhaps, not yet subjected to VAT ... an explanation would be welcome.
Cheers and TIA
Nils Gustaf
Nils,
to my best knowledge: in bond price is net of duty and VAT. quite often at the time of offering the wine is still it the county of production awaiting shipping or bottling. After being shipped to a bonded store and withdrawn the additional charges must be paid (actually before withdrawing, but until this time the wine could be stored in bond). these additional charges are based on the initial wine cost and do not change in time (assuming of course that the applicable VAT rates will not do) weather the wine increases in value or not. wine mostly comes in lots of 12 but also of 6 regular bottles - a case size, I have seen also lots of 6 magnums and 24 halfs
regards Wojtek also a foreign gentleman :)
Hi there,
As I understand the UK system (I don't know if it applies elsewhere) that's correct though duty (which is rather more likely to increase that VAT) is also charged at the rate prevalent at the time of removal from bond rather than at the time of purchase.
As you say most dealers only deal with full boxes (be those twelve or six for full bottles) but there's no requirement to do this, it just makes it easier for them to manage. There are about 10 bonded warehouses and depending on the amount you store they charge around about £8 per annum per case for storage.
I'd say that the in-bond price is important for en primeur offers where the wine isn't in the country; for those who buy wine that is kept in a merchants store to mature so duty isn't paid until its removal (which I do to a bit due to lack of ideal storage conditions and space at home); and that in-bond tends to be preferred for investment/at auction so that if the wine is resold to a non-UK buyer no payment of UK duty and VAT is ever required (so increasing potential profit).
Regards
Ian
Hi Nils I'd associate that with th Norwegian expression 'frihavn' equivalent to 'free port' meaning that imported goods stay untaxed in the storage until they are de facto imported and then you'll have to pay duties. Such goods may be reexported without any hassle, I understand, and while in this port storage the value is less than with the potential future taxes so your expenses may be lower (less capital bound) Anders
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