2018 saw further advances for Farr Vintners as increased sales re-enforced the company’s position as the UK’s - and probably the world’s - leading fine wine trader.
Sales of physically available wines were up an impressive 17% on the previous 12 months to £78 million with additional en primeur sales of £15 million being carried forward to give a grand total of £93 million.
More important than turnover, our modest profit margins were maintained at their usual level which allows us to provide our customers with a high level of service and professionalism from our vastly experienced and expert staff.
This is the 5th year running that sales at Farr Vintners have increased. We put this down to the continued strength and position of the company in the global fine wine market, hugely increased re-purchasing from our vast customer reserves, very good sales of 2015 Bordeaux en primeur (now delivered), great demand for the outstanding 2016 Bordeaux vintage (to be delivered Spring 2019) and particularly strong export sales which were helped by the weakness of the GBP against the US and HK Dollars and the Euro.
The only downside to the year was a disappointing 2017 Bordeaux en primeur campaign which was caused by a number of important châteaux releasing a good vintage at the price of a great one. As a result, en primeur sales of several of our favourite wines were non existant this year as some proprietors completely ignored our pricing analysis and advice.
Sales were made to customers in over 59 different countries which can be broken down by value and (by volume) as follows:
Sales to Europe were up enormously. These consisted mainly of Bordeaux wine being sold back to Bordeaux negociants who then re-exported them around the world. It is a sign of the strength and competiveness of the London fine wine market that - for the first time ever - we actually sold more physically available Bordeaux back to the Bordeaux trade (by value) than we bought from them in 2018. This, of course, is also an indication of the weakness of the Pound as a result of the farcical Brexit situation.
86% of all the wine that we sold this year was French. Sales by region of production shown here are by value (and by volume):
Whilst Farr Vintners remains a huge stockholder, promoter and passionate advocate of the wines of Bordeaux, this region achieved the lowest percentage of our turnover ever - down from 65% last year and a peak of 85%. Burgundy sales continue to grow impressively despite the much smaller production levels. Prices and demand for the top reds continue to soar.
In 2018 our biggest source of stock was the re-purchasing of wines from our own customers - and in particular from their reserves stored with us. Farr Vintners now holds some £400 million worth of stock in bond for our customers which is made up of millions of bottles that have been purchased from us over the last 40 years. These are sold for our customers mainly on a 10% commission basis or for outright cash deals. These “buy-backs” amounted to £38 million worth of wine coming back for sale (nearly 59% of all purchases) in 2018. Our hugely efficient brokerage service is operated by our team of vastly experienced buyers (with over 100 years of wine trade experience between them). The company is proud to offer customers genuinely expert advice on what to sell, when, and at what price, rather than the semi-automated systems of some of our competitors. Many customers who have sold wine through us this year have taken the opportunity to re-invest in more recent vintages or to purchase wines from other regions or at different price levels.
Farr Vintners celebrated its 40th birthday in 2018. I was honoured to be awarded “Chevalier de l’Ordre du Mérite Agricole” by the French Ambassador in January but a far greater achievement was that of our own Thomas Parker who passed the incredibly tough Master of Wine exam at the first attempt. Thomas is not only Farr Vintners’ first MW, but the youngest person in the world to hold this prestigious title.
We also hosted several important wine tastings in 2018 as well as attending hundreds more. Highlights included:
As many customers may be aware, the continued growth of Farr Vintners - and the ever-increasing size of our customer reserves - has placed considerable strain on the ability of Octavian warehouse to cope with our demands. Consequently we have recently opened our own state of the art temperature controlled warehouse in nearby Melksham in order to store our own fast-moving trading stock. This is managed for us by LCB. We hope that this will allow us to offer a more efficient and speedy service to both customers and suppliers going forward.
All in all, 2018 has been another great year for Farr Vintners and I would like to take this opportunity to thank my fellow directors, staff, friends in the wine trade and customers far and wide for their continued loyalty and support.
Stephen Browett
Chairman
