“It’s an example of the en primeur system breaking down completely”

As a wine lover and a trader, Slurp CEO Jeremy Howard breathes new life into online fine wine retailing

Slurp. It’s used to describe the sort of noisy drinking that might characterise a rowdy night out; a dinner that’s degenerated into a party, or an attempt to consume hot soup. However, it’s not a word one would normally associate with selling fine wine.

And yet the link between this term and the likes of Lafite has become commonplace as online drinks retailer Slurp has moved rapidly and craftily into this high-priced sector. In fact, 30% of the internet-only company’s total global revenue is from fine wine, while its Q1 sales grew 261% on the same period in 2010 due to a January sale on slurpfinewines.com and Chinese New Year-driven demand through its Slurp.Asia division.

But it was the company’s ability to shift substantial quantities of Rieussec 2010 over the summer which highlighted Slurp’s new-found significance in the fine wine sector.

CEO and former Deutsche Bank trader Jeremy Howard explains the background to the sale success. “In order to secure allocations of Lafite, négociants take large parcels of Rieussec [which is part of the DBR Lafite portfolio], which they then sell onto the UK merchants, who don’t have a use for Rieussec at the price they are supposed to sell it, so they dump it anonymously on the Liv-ex exchange.”

So, while Rieussec was released onto the market at the end of May for €48 (£42) per bottle, or over £500 per nine-litre case, by July it was selling for as little as £200 on liv-ex.com. Once Rieussec hit this low price point, “we bought very large numbers”, records Howard – which explains Rieussec’s position as most traded label by volume on the Liv-ex exchange during July.

With the iconic Sauternes snapped up, Slurp then offered Rieussec to its customers for £250, and although Howard is reluctant to give an exact figure, he does boast: “We sold hundreds of cases.”

Importantly, the deal, believes Howard, has widespread implications for Bordeaux pricing. “It’s an example of the en primeur system breaking down completely,” he says. “The château and négociants tried to control the price but failed in this case.”

In essence it’s increasingly the market, not the châteaux, that set the price, and, like 2009, he sees cru-classé Bordeaux continuing to trade at a discount to initial release prices, meaning, next year: “Customers will be saying why buy in July when by the end of the summer the wines will be trading at a lower price?”

Whatever happens, one can be sure that Howard will be quick to benefit. “We look at the market a lot and we look at it with a financial analyst’s eyes – we are always looking for anomalies and things our customers can profit from.”

Indeed, Slurp itself is an operation Howard plans to profit from having invested in the business in June 2006 and then again in January 2009, when he became full-time CEO.

Explaining his switch from banking to online wine retailing he says: “I’m a wine lover but I got frustrated by the options available to me… I, and most of my friends had an idea of what we wanted to buy – we wanted to buy the wines we read about or drank in restaurants – but there was no opportunity to buy a range of these premium wines on a good online platform.”

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