The Wine Merchant issue 60

 

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The Wine Merchant issue 60

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THE WINE MERCHANT. An independent magazine for independent retailers Issue 60, July 2017 Read all about it! Cava sales down 18 per cent! THIS MONTH 2 BACCHUS Majestic’s £1.5m loss and why Market Row says “no” 4 comings & GOINGS New branches for Reserve Wines and The Sampler 8 tried & TESTED Ready for blood, custard powder and eucalyptus? Ruth Spivey recently organised London’s latest Wine Car Boot, encouraging wine lovers to abandon supermarket wines in favour of those sold by independents. She is pictured with (left) Darren McHugh of The Ledbury hotel and Daniel Morgenthau of the Portland and Clipstone hotels. More on page 3. 18 raffles fine wines Gloucestershire merchant delighted with younger clientele 27 the villages people Marvelling at the best of the Mâconnaise Taurus is bullish about crowd funding projects Surrey merchant Taurus Wines has development near Guildford, which will be a embarked on an expansion programme after destination for food and drink lovers. a successful crowd funding campaign. Taurus’s new backers have been given shares The £275,000 raised by owners Rupert and now collectively own 10% of the business, and Felicity Pritchett will mean the business, in addition to the perks and rewards that are established in 2001, can move to a neighbouring usually part of the package with crowd funding. barn where the sales area will be far bigger Rupert Pritchett says the company expects to than the converted cow shed from which Taurus pay a dividend of up to 6% from year two, and currently operates. has not ruled out another share issue in three The funding also means that Taurus can years’ time. open a second site this year at a new farm Full story: pages 12 to 14 30 david williams Just how super are supermarket wine ranges? 36 focus on new zealand Looking beyond Marlborough Sauvignon Blanc 42 focus on south africa Five reasons why the world fell in love with Cape wines 48 supplier Bulletin Essential updates from agents and suppliers

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BACCHUS b A £500,000 profit and a £1.5m loss Matt McNamee of The Tasting House in Reading, Chiara Sorgente of Jeroboams, Thom Allinson of The Oxford Wine Company and Rosamund Hall of Burgess & Hall in London joined a Wine Merchant trip to Abruzzo last month. Full report in the July issue. Majestic chief executive Rowan Gormley was contrite in the company’s most recent set of financial results, which presented shareholders with a £1.5m year-end loss. Although its UK retail operation has seen eight consecutive quarters of growth, Majestic is still being dragged down by the costs of integrating the Naked Wines operation that Gormley sold to Majestic prior to taking the reins of the combined business in 2015. Majestic is also having problems with its commercial division, where earnings have fallen by 36%, and is seeing margins squeezed in its stores – partly due to Brexit-inflicted currency issues. Gormley admits that “more than we would have liked” has gone wrong but says the company is setting itself new targets in areas such as customer satisfaction and retention, product availability and wine quality. Majestic has also had a problem holding on to its best people, many of whom look at the independent trade as a more productive channel for their talents. They are “frustrated by the fact that there is nowhere to go once you make it to store manager,” Gormley says. “We have probably been over-cautious in addressing this historically, but have now tackled the issue head-on by testing a new Partnership programme where store managers are given the chance to literally run their own shop. “Managers will be able to earn a percentage of their store’s contribution by having more control over the day-to-day running of their own store.” Gormley says Majestic is in “much better shape than we were two years ago” and is upbeat about the prospects of reaching a sales figure of £500m in 2019 compared to the £465m achieved in the past financial year. But he admits “there is still a lot to do” and warns that “UK retail is likely to be in for a rough ride, with downward pressure on demand due to falling household incomes and upward pressure on prices”. Since July last year Majestic shares have fallen from £3.96 to £3.25 (as The Wine Merchant went to press). Analysts are looking for the share price to level out at £3.75 and although some still give the stock a “buy” rating, others have recommended holding while a few have downgraded Majestic to “sell”. That’s the course of action that Gormley THE WINE MERCHANT JULY 2017 2 himself has taken. One June 15, the day of the results announcement, he offloaded 50,000 of his 4.5 million shares at £3.46, making £173,000. The following day he disposed of a further 100,000 shares at £3.57, pocketing £357,000 in the process. ‘The answer is very possibly no’ It’s always good to have a Frequently Asked Questions section on your website. Dave Simpson of Market Row Wines in Brixton wins the prize for the best example of the genre in the independent trade. Some edited highlights: “I probably haven’t got what you are looking for specifically. “No I don’t do gift wrapping. “I can deliver although it is discouraged and I’m not always prompt. “Unfortunately, I, myself, don’t live the dream of travelling the world, eating in restaurants, scouring their wine lists and knocking on cellar doors. “As a general guide, if your question starts with ‘do you …’ then the answer is very possibly no.”

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Supermarket wine gets the boot The most recent Wine Car Boot was the biggest yet – “and we feel the best”, according to organiser Ruth Spivey. The London event was established to encourage consumers to turn their backs on supermarket wines and explore what’s on offer in the independent trade. “We had a record turnout of around 1,500 people,” Spivey adds. “Everyone sold plenty of wine; people were tasting, drinking and buying independent wine from noon till 8pm. “All the shops pulled the stops out as usual, some with brilliant cars and some pitching up on traditional market stalls. This enabled us to fit more in and create a true market atmosphere.” Participating merchants included Vinarius, Renegade Urban Winery, Nekter Wines, Borough Wine, Dynamic Vines, Le Grappin, Maltby & Greek, More Wine, When in Rome, Passione Vino, Vinoteca, New Zealand Cellar, Swig, Newcomer, Tannin & Oak, Rawland Wines, Natural Born Wine, Androuet and The Greek Larder. The most recent event was held at Kings Cross “which has become our unofficial home”, according to Spivey. But she adds she is also in talks with a venue in west London. Flying Füchs “Our Man with the Facts” • The first person to use the term orange wine to describe white grapes fermented on their skins was David Harvey of Raeburn Wines in 2004. The term has met with opposition from producers on the Orange region of New South Wales. • The oldest known vine in Europe exists in a vineyard in Maribor, Slovenia, and is thought to be 400 years old. It still produces a small quantity of wine. • The French term moelleux, indicating a wine with medium sweetness, takes its name from the word moelle, meaning bone marrow. • Alsatian winemakers once liked to interplant different grapes in their vineyards. The practice was stopped by annexing Germans in 1871, who imposed a monovarietal system. Top: Mickey Fallowes from London independent Passione Vino; below, the teams from Natural Born Wine and When in Rome THE WINE MERCHANT JULY 2017 3 • Chianti producers are allowed to add a few bunches of white grapes to fermentation tanks to soften their red wines. In the Luberon region of Provence, up to 20% of Vermentino can be added to red grapes before fermentation.

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Rent hike forces Sampler relocation The Sampler has closed its South Kensington branch following a “massive” rent rise and is opening a new branch in Wimbledon. The company, which inspired a generation of independent merchants with its early adoption of sampling machines, says the new Leopold Road store is roughly the same size as its Islington branch, at around 1,000 square feet. Chairman and founder Jamie Hutchinson says the South Kensington store, which opened five years ago, had been given a temporary refit last summer “to see us through to the end of the lease” even though it had become obvious that the landlord’s increasing rent demands would mean the branch was ultimately unviable. “It’s frustrating because the site was doing really well – we were 30% up on last year, like for like,” he says. “The rents there are pretty enormous anyway and [combined with rates] much, much more than our total wage bill, and we can’t swallow that kind of rise. I feel sorry for the area in a way because I can’t see how any non-loss leading type business is going to survive in the long run there.” He adds: “The business was growing really quickly but that consumes cash because you need stock in order to be able to get those sales in. We just found ourselves in a position where we had about two thirds of our assets sitting in a shop that ultimately wasn’t making a decent return on the money, so we thought it would be a better idea to look at something more similar to Islington.” The new Wimbledon site has office space to the rear, which will be deployed to help keep pace with The Sampler’s growing wholesale business. Staff from the South Kensington branch, above, will transfer to the new Wimbledon store “It’s got that community feel, very similar to Islington, with families living there,” says Hutchinson. “South Ken just doesn’t have families living there. It’s so full of investment properties – it’s a weird area now. “We’re looking forward to getting back to that community feel. We had some really good local customers, but not enough to keep the business going, and the rest were tourists or people travelling across London. We get to know our customers in Islington really well and it was harder to do that in South Ken.” There will be slightly fewer Enomatics in Wimbledon due to the peculiarities of the floor layout, but the store concept – and the wines on offer – will be the same as in Islington. Hutchinson reports that a well-chosen wine typically sees its sales rise by a factor of between three and 20 when put on taste in an Enomatic – but there are a few that register a decrease. “Those tend to be the big names, the ones that you would buy based on the brand and familiarity with the name,” he explains. “But when you put them on taste against the wines that THE WINE MERCHANT JULY 2017 4 people have never heard of before, people never buy the big brand.” The Sampler is already on the hunt for a third shop, almost certainly within London. “It’s surprising – with the euro and Brexit and all that stuff, you would expect business to be really tough, and it just isn’t,” says Hutchinson. “Whether that’s just a London thing, or whether it’s just us, we are finding business really, really good and we just need to find the right site.” The hunt is already on for a third Sampler site

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Kate reserves place at Mackie Mayor Reserve Wines is on the verge of opening its fourth branch, in the form of a concession within an iconic new food hall in Manchester city centre. The Mackie Mayor building in the Northern Quarter was opened in 1858 as a meat market but closed in 1974 and has fallen into disrepair since then. Reserve Wines is already a tenant at Altrincham Market, which is owned by the same landlord, and owner Kate Goodman says the format will be similar at the new site. “It’s basically a bigger version of Altrincham,” she says. “It’s a stunning building with a mezzanine and a glass vaulted ceiling. “A group of us are going in and replicating what we do in Altrincham, essentially. We’ve got a bit more space so we can have a bespoke retail area and a bar area.” Goodman is exploring the possibility of offering wines on tap for the first time. “I Kate Goodman: bored of Sauvignon Blanc think it could be more efficient space-wise than loads of bottles,” she says. “Visually it’s great and it’s just a nice way to drink wine, providing the quality is there.” The Reserve team is currently working on the aesthetics of the new site, which will borrow more from Altrincham than from the company’s more traditional shop in Didsbury or the garden centre concession near Warrington. “It’s city centre, it’s Manchester, it’s industrial … you kind of want it quite raw, really,” says Goodman. “The model at Altrincham and Manchester is really exciting. It’s really a collaboration and it’s just nice to be involved in it. We work together with other traders as well as independently. “And it’s great to see people drinking in – I’ve really enjoyed that side of things. Usually as a wine retailer you sell the product, you go home and you don’t see people enjoying it. But in Altrincham people come back straight away and give you instant feedback. We can open so much stuff and sell it by the glass. “We’re trying really hard not to sell Sauvignon Blanc by the glass – not because we don’t like it, but because it’s all anyone ever asks us for! It’s great and there are some great examples, but let’s try something else. “I really feel passionately about that. Our job as an independent retailer is to open people up to other things. That’s something we can do that supermarkets can’t do.” Other Mackie Mayor tenants include Blackjack Brewery and Honest Crust pizza. Hunt is on for a new owner in Wiltshire The Altrincham market store provides a template for the Manchester project THE WINE MERCHANT JULY 2017 6 Rob Hunt is selling his shop, Ruby Red Wines, in Bradford on Avon, Wiltshire. “It’s a great little business with loads of potential to expand further,” he says. Hunt’s other commitments mean he can no longer give the business the time it deserves. “Being a true independent is great fun, especially in the town, but I feel guilty for not being there so much,” he says. The shop will be sold as a going concern complete with its “great staff” and, Hunt says, it is “ready to roll for anyone wanting to maybe wind down and become an important part of the community.”

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Adeline Mangevine Wholesale more lucrative than retail Premier Cru Fine Wine in Shipley, West Yorkshire, is not regretting this year’s decision to move away from retail sales and to focus squarely on wholesaling. Operations manager Tim Knibbs says the move was prompted by “wholesale and bulk-buying being where the money is at the moment”. He adds: “We’ve always had this place as a warehouse for stock, so it made sense.” Since closing the shop, the business – owned by Richard Carr – has gained another 20 wholesale clients, bringing the current total to around 70. With its recently-built office, new vans and full-time drivers, Knibbs is confident the business can expand nationwide. Previous retail customers, including members of the Premier Cru wine and gin clubs, can continue to buy with a minimum order of 12 bottles. “We do a lot of local deliveries,” says Knibbs. “What we have stopped is people nipping in for one or two bottles.” Grayshott Wines on the market Grayshott Wines in Hindhead, Surrey, is up for sale. Having owned the business for over four years, Ram Siva has made the decision to open a “convenience style” shop where half the retail offering will be wine. While he is looking for a bigger premises closer to home in Fareham, Grayshott Wines will be sold as a going concern. Siva says: “I have built up the customer base, so whoever comes in, if they have proper knowledge, can take it to another level. “There has been some interest but there have been some time-wasters.” Hasty despatches from the frontline of wine retailing To outsiders, we independent wine merchants look like a collegiate bunch. We taste together, lunch together, travel together – and bitch together. Customers, suppliers, critics, lack of wine coverage on TV, supermarkets, duty … the list of negatives that unites us is impressive. But when it comes to the actual product we sell – wine – our behaviour towards each other can range from defensive, competitive and patronising to downright rude. We are at our worst anywhere we have to score and assess wines with each other, when our skill and judgement on what we consider good is put under scrutiny by our peers. In a world of unsociable hours and slim margins, we’ll take anything that makes us feel like the king or queen of our castle. I’m reminded of this at a tasting and round table discussion on the new Argentina. It soon becomes clear “new” means the same old interpretations of Malbec (kill me now) with a bit of Torrontes, Bonarda and Cabernet Franc chucked in as an afterthought. The idea is to taste, score and then discuss. “So what were the wines that piqued your interest, Adeline?” asks the moderator. I start to wax lyrical about one of the wines that stood out from the overextracted, over-blown vanilla gloop. A vibrant, high-altitude Malbec that just sung in my glass. The retailer in the seat opposite me curls his lip and says witheringly: “Oh, we could never sell a wine like that. It’s far too thin. Our customers want the best they can buy – and it needs to be big, bold, smooth. They want proper Malbec. Something like that would just be unacceptable in our city centre area. But I’m sure in your suburb, it’ll work.” I could’ve just sat back and laughed. I know my customers and I know a good section of them would find my top pick interesting. But no. I am right in there. Hackles duly risen. Sleeves rolled up. Caution to the wind. “Malbec is SO boring. It’s everywhere! Who on earth would want to stock many of these Malbecs? They made me yawn. Others fawn but I just yawn as yet another boring gloopy Malbec is poured And my customers don’t want me to sell them wines that make me yawn. They’re a discerning bunch who look to me to unearth gems. They’re on a voyage of discovery and I am taking them there with wines like THIS.” Oh, if only this were true. I am about to say how Argentinian Malbec is a safe, lazy choice when I catch a wild look in the eye of the woman at the end of the table. Then I remember she’s the PR who organised the round table on behalf of First Families of Mendoza. Oops. There goes my chances of nabbing a freebie to Argentina anytime ever. THE WINE MERCHANT JULY 2017 7

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tried & Tested Château des Pertonnières Beaujolais 2016 Last month’s excellent Beaujolais tasting in London was a great opportunity to see the breadth of styles offered by the 10 crus, but also the value and quality available at generic and village level. This light, soft and juicy example, with hints of strawberry bubble gum, is a charming and uncomplicated summer star. RRP: £13 ABV: 12.5% Roberson Wine (02017 381 7870) robersonwine.com Bissoni Girapoggio Forli Cesena 2014 The nose is pure blackcurrant – with perhaps a hint of high-class shower gel – which suggests a dense blockbuster may be about to follow. But what you get with this elegant Sangiovese is far fresher and more measured, with plum and spice elements and a dry, mineral aspect to the finish. RRP: £14.60 ABV: 13.5% Flint Wines (0207 582 2500) flintwines.com The Wine Merchant’s Traditional Claret 2014 FMV’s new Wine Merchant’s Range is a joy: a really well chosen line-up of box-ticking wines, from English fizz through Kiwi Sauvignon to Rioja, Chianti et al. Most have immediate crowd-pleasing appeal, yet the claret doesn’t pander to populism, and has authentic grip and mellow, dialled-down fruit. Definitely a food wine. RRP: £11.50 ABV: 13.5% Fields Morris & Verdin (020 7819 0360) fmv.co.uk Slobodne Oranžysta 2015 If punters are struggling to get their heads around the concept of orange wine, this Pinot Gris from Slovakia, made with 10% whole-bunch grapes and fermented outside in open vessels, could be a surprisingly helpful starting point. It may look alarming, but it’s a gentle and refreshing al fresco wine with curious (but affable) hints of custard powder and tobacco. RRP: £25 ABV: 12% Modal Wines (07776 322374) modalwines.com Gayda Viognier 2016 Imagine the best Viognier that the south of France can produce at under £12 on the shelf and that’s pretty much what you have here. It’s brimming with fruit flavours, from pears to bananas, by way of apricots and pineapple, with a luscious buttery edge. A wine that, like Carlsberg Special Brew, will rarely be drunk indoors, though admittedly for different reasons. RRP: £11.25 ABV: 13% New Generation McKinley (020 7928 7300) newgenwines.com Maison Jean Loron Domaine des Billards Saint-Amour 2016 Loron is a family business dating back to the early 1700s, though the vines used in this wine are are a mere 50 years old. Ageing takes place in three-year-old barrels, foudres and cement tanks, yielding a friendly and generous wine with supple red fruit character and gentle tannins. Are we allowed to say “fun”? RRP: £15.99 ABV: 13% Hayward Brothers (0207 237 0576) haywardbros.co.uk Cesari Jèma Corvina 2012 Carson & Carnevale positioned this wine within its “discovery flight” at its recent trade tastings and we promise we declared it our favourite before we spotted it was also the most expensive. Eighteen months in French oak and a year in bottle has delivered a deep, structured and delicious Valpolicella with hints of cherry, coffee and maybe even eucalyptus. RRP: £24.99 ABV: 14% C&C Wines (020 3261 0929) carsoncarnevalewines.com Susana Balbo Crios Cabernet Sauvignon 2016 So where are we exactly, these days, with Argentine Cabernet? Definitely on the right tracks, if this smooth Mendoza example is anything to go by. Is that a waft of crisp green pepper we’re getting on the nose? Are we detecting hints of blood and dried fruit on the palate rather than sugar and jam? Yes. Yes we are. Onwards! RRP: £16.50 ABV: 13.5% Las Bodegas (01453 874772) lasbodegas.co.uk THE WINE MERCHANT JULY 2017 8

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2017 THEGREATSHERRY TASTING SAVE THE DATE: MONDAY 11 SEPTEMBER 2017 11am – 5pm The world’s largest Sherry tasting is back. Join us for our annual trade event to taste over 200 Sherries from over 40 different producers, representing the very best of these unique wines from Jerez. The event will also include Sherry masterclasses and a feature on Sherry cocktails. Register online www.sherry.wine/media-trade/events/great-sherry-tasting-2017 #GreatSherryTasting @SherryWinesUK Venue: OXO2, London THE WINE MERCHANT JULY 2017 9

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bits & BOBs FAVOURITE THINGS Ben Watson Glug Wines & Cheeses, Putney Favourite wine on my list A Mano Imprint, Susumaniello. Susumaniello (meaning “little donkey” due to its difficulty to train when growing) is an uncommon and ancient grape from Puglia. It displays unique characteristics of blackberry and chocolate, with a fine tannin mouth feel. It’s off-dry with 12g residual sugar. I love showing it to people in the shop because it’s completely different to anything they have ever tried. Cava sales see 18% decline in the UK Magpie Cava sales in the UK fell by 18% in 2016, according to figures released by the DO. Global shipments were broadly flat at 245m bottles. The region is pinning hopes on its new single-estate classification, Cava del Paraje, for which wines must spend at least 36 months fermenting in bottle. Belgium remains the biggest export market for Cava, followed by Germany and the UK. The Drinks Business, June 27 wine production. Sixteen wineries are set to be granted an “estate wine” trademark, indicating they have full control of their vineyards, stick to limits on yields, and produce and bottle wines on site. China has already introduced several geographical indication marks but these have had little impact in the market. Decanter, June 28 • Moldova’s Chisinau International Airport has been renamed Wines of Moldova Airport. The idea is to send the message that Moldova is a “country of wine”. More than 8,000 Moldovans voted for the name change. Decanter, June 30 Favourite wine and food match Greywacke Marlborough Sauvignon Blanc and Selles Sur Cher goat’s cheese. I’ve fallen in love with the combo. Favourite wine trip I love the Douro Valley and I was lucky enough to have been hosted by some amazing winemakers both there and in Porto, following the process of Port production from start to finish. Favourite wine trade person Definitely my manager Dee. He runs two successful businesses, while being the head of his family, studying for wine qualifications and being a master chef. The man’s a saint! New Cava del Paraje classification may help China to push new estate wines China has taken its first steps towards an official regulation system for quality Outrage at £6 bottle of wine Peterborough City Council spent nearly £4,500 on food and drink for councillors last year – a period in which £28m of savings was made in the authority’s budget. A spokesman said that the most recent buffet had included one £6 bottle of wine shared between members. The Taxpayers’ Alliance said the council was “surely crossing a line”. Peterborough Telegraph, June 30 winemerchantmag.com 01323 871836 Favourite wine shop Huntingdon is my home town and The Bridge Hotel has a wonderful wine shop and tasting centre. Many of my friends work at The Bridge and it has many happy memories attached. winemerchantteam@gmail.com Twitter: @WineMerchantMag The Wine Merchant is mailed freely to the owners of the UK’s 828 specialist independent wine shops. Except one, and that’s deliberate. The magazine is edited by Graham Holter. Printed in Sussex by East Print. Registered in England: No 6441762 VAT 943 8771 82 © Graham Holter Ltd 2017 THE WINE MERCHANT JULY 2017 10

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analysis: Crowd funding When your customers become your investors Taurus Wines has raised £275,000 to put a rocket under its expansion plans. Rather than talk to the bank, Rupert and Felicity Pritchett went the crowd-funding route. Parting with some of their equity was a price worth paying, they say, for the financial security they have achieved Plenty of wine merchants dream of opening more branches, or at least splashing some cash on a refurb. But raising finance isn’t always a straightforward business. For Taurus Wines, desperate to escape the confines of a former cow shed in the Surrey Hills that's been its home since 2001, the solution was staring owners Rupert and Felicity Pritchett in the face. Maybe their own customers could provide them with the investment they needed. Crowd funding is not exactly a new idea For that sort of cash injection, they recognised that investors wouldn't simply settle for a warm feeling and an invitation to the launch party. They would want a stake in the business. And so began a long and painstaking process with Crowdcube, whose clients include River Cottage and Brewdog. “I was incredibly impressed with everything Crowdcube did,” says Rupert. “However, don’t underestimate the stress and the time taken to fill in all the compliance. You’re looking at five years’ ‘We were trying to create a crowd, a club, so a single investor would have been helpful but not ideal’ in the wine trade. Several merchants have raised cash in this way, typically to help them purchase new equipment or to move to new premises. The Taurus scheme was more ambitious. The Pritchetts had set their sights on a 2,000 square foot barn beside their existing shop, and also hatched plans for a second branch. To make it all happen, they needed investment of at least £200,000. management accounts, and lots of legal checks. They wanted copies of every single bank loan we’d ever had, even ones we’d paid off, along with proof they’d all been paid off. “Felicity had written on my CV something like ‘Rupert has been in the wine trade for over 20 years, has travelled the world tasting and buying wine, been a judge in major wine competitions and has THE WINE MERCHANT JULY 2017 12 the WSET diploma’. Nothing controversial there, but the whole thing came back in orange and I had to find my very first contract of being in the trade. “I couldn’t say ‘travelled the world’ – only countries that I could prove I had been to on dedicated buying trips. So if I had been in the south of France on holiday and popped in somewhere to buy some wine while I was there, that doesn’t count as a buying trip. “I had to get the likes of Wines of Chile and Wines of Argentina to list all the countries I had been to. I had to prove which wine competitions I’d been a judge for. I could have given them a link to the WSET website, which has a list of graduates, but I had to get a certified copy of my diploma certificate. “I’m not knocking it at all, it’s a good thing, but don’t underestimate the amount of time it will take up.” A FRIEND HELPED the couple make a short film to explain why the investment was needed. The response was as good as they could have hoped for: the initial target was hit within 24 hours. “I had an inkling it would all go well,” says Rupert. “We had three people who

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Felicity and Rupert Pritchett: now joined by 50 other shareholders with a combined 10% stake in their business enquired about taking the whole lot. What we were trying to do was to create a crowd, a club, so a single investor would have been helpful but not ideal.” The most that any individual was allowed to contribute was capped at £20,000, though one husband and wife each pledged the maximum amount and so have a combined stake of £40,000. The deal was that Taurus needed to achieve its target or else abandon the project, on the basis that it could not deliver on its promises without the full £200,000 in the bank. “If I’d got £180,000 it would have been incredibly frustrating,” says Rupert, “and at the end of the 30 days, the pitch would have closed and I would never know who the people that had promised money were, because it’s all done confidentially and that would be the end of play. “Once you’ve got the £200,000 you can obviously deliver what you said you will, so over-funding is possible, providing you can come up with some plausible plan for what you’ll do with the money. The minimum we needed to achieve was £200,000 and we capped at £250,000.” Yet in the end, £275,000 was raised from some 50 investors, equating to about 10% of the shareholding in Taurus, a business with annual sales of more than £1m. “The company structure is very straightforward – they’ve taken it from what was 200 shares and turned that into half a million shares,” says Rupert. “There THE WINE MERCHANT JULY 2017 13 are no new directors or anything like that.” The new shareholders are not eligible to vote but have been given various perks, such as VIP cards for the Enomatic machines that will now be installed, invitations to a tasting event and space in the spiral cellar that will be created. Crowdcube took care of all the legalities. “That’s what their commission is there for, really,” says Rupert. “I’m not allowed to say what their commission is, unfortunately. I had to sign something to say I wouldn’t.” FOR THE PRITCHETTS, crowd funding has offered some clear advantages over borrowing from the bank. In time, its Continues page 14

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analysis: Crowd funding From page 13 investors should be able to get a return on their money too. “The disadvantage of going to the bank is obviously that you have to put your house on the line; you also have interest to be repaid from day one," says Rupert. “I’ve been completely open with all my investors – they’re not going to get any dividends in year one but from there on in they should make about 5% or 6%. It’s not going to make them rich, but it’s a solid return.” Crowdcube is developing on its own mini stock exchange on which shares can be traded. “That’s one exit,” says Rupert. “We have been very clear, and anyone investing has had to complete all sorts of online questionnaires to say that they understand they can’t get their money back when they want it.” However if any investor became desperate for their money, Pritchett says an accommodation would almost certainly be reached. “We’re not here to upset people – the whole point was to create second outlet, part of a new “foodie heaven” farm shop at Loseley Park near Guildford, will open soon. The park's owners are creating a development based around a large courtyard area that will include a farm shop, butchery and tea room as well as the Taurus store. Board meetings are usually good fun It’s possible, though not definite, that the crowd-funding exercise could be repeated in a few years, when another 10% of shares might be released. “However, beyond that you have to get votes and things like that. At the moment When crowd funding works … and when it doesn’t The New Zealand Cellar used Kickstarter in 2015 to raise money for its first shop, in east London. It set itself a target of £35,000 to ease the financial burden. In the event, Melanie Brown received £42,502 from 194 backers: 12 of whom pledged £10 and were rewarded with “a virtual high-five” and 11 who pledged more than £1,000 and were offered a “Total New Zealand Wine Experience”. London merchant Humble Grape is one of wine’s highest-profile crowd-funding success stories, hitting the headlines in 2014 when its £250,000 equity offer on the Seedrs website was oversubscribed and £356,670 was raised towards its expansion programme. Earlier this year Lancashire merchant Fullaloves raised £15,000 on Kickstarter to finance a sampling machine at its Longridge wine bar. Seventy-six backers pledged a minimum of £10, earning rewards from owner Ben Fullalove such as mixed cases or tapas evenings. ‘Investors are not going to get any dividends in year one, but from there on they should make 5%-6%’ ambassadors for the business as much as it was to get the money in. A disgruntled shareholder could do an unbelievable amount of damage.” As things stand, Taurus has established a network of people “who will be singing our praises at dinner parties, weddings, school balls and the like – and that’s priceless”. WORK ON THE new premises will be finished by the end of the year and the we didn’t need any more money than that, so our best plan is to deliver on our promises and then sit down and take stock in three years’ time and say: we’ve got these two stores, hopefully they’re up and running nicely, shall we have another go, but this time for rather more?’” For now, the couple are content. “It’s been a good experience,” says Rupert, “and we’re so pleased, because we’re secure for many years to come.” THE WINE MERCHANT JULY 2017 14 Pop-up wine events business A Grape Night In needed finance to establish itself in a permanent venue. Unwined in Tooting was the result, a Kickstarter project that had aimed for a modest £5,000 but actually pulled in £8,000. The benefactors’ names are framed at the store in Tooting Market; many have yet to claim their rewards for investing. Another wine events company, The Liquorists in Manchester, wanted to raise £5,000 towards its proposed Grape to Grain wine store, craft beer shop and cheese emporium in Prestwich. But last year’s project stalled when 25 backers could only muster up a combined £1,966.

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