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- Jerry D Mead - 09-05-1999
//Excerpted from a recent Mead On Wine newsletter/column. JDM//
By JERRY D. MEAD
COLLECTABLES You've surely read about the fancy prices paid for old, rare or unusual wines. You've no doubt rubbed elbows with the fellow who brags about the value of his wine collection. And what about the guy who served that red wine at dinner saying it was worth hundreds, though he had paid only a few dollars just a few years before?
It's enough to make you give up collecting coins, stamps, baseball cards or Pink Panther paraphernalia and jump on the wine collecting bandwagon.
Big flashing yellow light! Caution! Does wine appreciate in value? Some of it does. Is wine a good investment? Probably not for the average person.
Collectors want assurances that wine has been stored under the most ideal conditions, which means in a real cellar (which few of us have these days) or investing in fancy temperature and humidity controlled storage devices.
Then there's the biggest problem of all...reselling your wine when it has appreciated sufficiently in value or when for some reason you need your investment to become liquid in another sense.
You may discover that the wine you've been cellaring all this time isn't really of interest to other collectors. Only a handful of wines in the world have real collectable value, the highest rated wines of Bordeaux (Lafite, Latour, Margaux, etc), even fewer famous red wines of Burgundy and Sauternes, some Vintage Ports and very few famous and highly regarded California Cabernet Sauvignon-based wines.
But the biggest hurdle of all is that in almost all of the 50 states there is no "legal" way to sell your wine. I know, it's yours, you paid for it, you have a receipt for it, but the state says you can't sell it unless you are licensed wine merchant.
There are some exceptions. Some states make provisions for estate sales by consumers, which means you can sell your wine after you're dead.
California also has a law saying consumers may sell only to people with licenses, and only if the reds are ten years old and the whites five. That means you bought the wine at retail and now you can only legally sell to a dealer who only buys at wholesale prices. Tough to make a profit.
Your best chance is to live in a state that allows you to sell through auction houses which have wine licenses, because they only take a percentage of the sale.
What we're talking about here are strictly legal ways to sell your wine. Truth is people have always sold or traded wines to other collectors and friends (the states consider a trade just as illegal as a sale, by the way), sold wines direct to other consumers via Internet auction operations like E-Bay and Amazon.com and openly ran ads in wine publications such as The Wine Spectator and The Wine Trader. In more than 30 years of covering the wine scene I have never heard of anyone being arrested for these kind of collector to collector sales...until now!
A story in The Washington Post alerted me to the fact that Mark Phillips of Alexandria, Virginia, was arrested by Fairfax County Police and Virginia Alcoholic Beverage Control (ABC) for selling a single bottle of 1991 Chateau Lafite Rothschild for $110 to an undercover officer in a sting operation. As result Phillips faces a $2500 fine and up to a year in jail if convicted.
Phillips heads up a non-profit wine club in the area with about a thousand members, one of which is a diplomat en route to a country where it is not possible to take his small collection (about a dozen bottles) of varying vintages of Chateau Lafite. Phillips, who is not in the habit of selling wine, agreed to help the fellow out by placing a notice of the wines' availability on the club's website. This was not a "for profit" venture.
So how did the cops handle this misdemeanor? Six cars and a dozen armed officers with a search warrant held Phillips, his wife and daughter in their front room while searching the house. A little overkill? The equivalent of using a .44 Magnum to assassinate a fly?
We had lots of questions for Alexandria ABC's Phillip Disharoon, but he didn't return our calls. Like why it took a dozen cops to bust one misdemeanor suspect with no previous record? How many people have been cited for the same offense in the past 20-30 years (we suspect none)? What motivated ABC's interest in Phillips and cracking down on collectors at this particular time?
If you're wine collector...be careful out there.
- n144mann - 09-06-1999
Jerry, I have heard too that it is illegal to sell through the E-bay auctions.....as far as you know, has anyone been arrested for doing so?? And what responsibility, if any, will E-bay have since they have set up and allowed the sales?? I know they claim no responsibility for what is bought or sold, but does that get them off the hook?? Or is this whole area an un-charted area in the law books??
Nancy
[This message has been edited by n144mann (edited 09-06-99).]
- Jerry D Mead - 09-07-1999
Pretty much uncharted. To my knowledge (and I probably would have heard) no one has been busted for buying/selling on the internet auction sites.
JDM