Berkeley store sued over $3M of undelivered wine

Seven customers are suing Premier Cru, a wine retailer at 1011 University Ave., for not delivering wine they had purchases. Photo: Gordon Commercial Realty
Seven customers are suing Premier Cru, a wine retailer located at 1011 University Ave., for not delivering wine they had purchased. Photo: Gordon Commercial Realty

Seven disgruntled customers have filed lawsuits against Premier Cru, a high-end wine store on University Avenue in Berkeley, contending that the store purchased thousands of bottles of expensive French wine on their behalf, worth around $3 million, but never delivered it.

All of the plaintiffs in the lawsuits — many of whom live in Asia — say they paid Premier Cru to buy them “futures” of French Bordeaux, but they have yet to see the wine. (Wine futures are wines that are still aging in barrels and not yet bottled.) Some of the customers said they have been waiting years for their wine. Whenever they call the store to complain, they said, they hear a litany of excuses.

Read more wine stories on Nosh.

“Premier Cru’s response to each inquiry … concerning the undelivered wine was essentially the same,” reads a complaint filed by attorneys for Mun Hei Li, a Hong Kong wine investor, in Alameda County Superior Court. “The wine was at a port in France waiting for shipment to China, or the wine was on board ships on their way to China. Such claims were false and Premier Cru knew they were false because the missing wine was never on its way to China,” reads the complaint.


Premier Cru on University Avenue, designed by David Trachtenberg and built by Kaufman Construction, won a Berkeley Design Advocates award. Story here. Photo: BDA
The interior of Premier Cru at 1011 University Ave. Photo: Berkeley Design Advocates

The owner of Premier Cru, John Fox, said many of the disputes are the result of new customers not understanding the length of time it takes to deliver futures. However, he did admit that Premier Cru sometimes has cash-flow problems, making it difficult at times to pay suppliers as well as the customers demanding refunds.

To address this difficulty, Fox and a partner have put the store at 1011 University Ave. up for sale. Gordon Commercial is offering the property, made up of three parcels and three buildings, on the market for $7.5 million.

Speaking about the complaints outlined in the suit, Fox said: “Most of these, or all of these, are from people, mostly Asians, who are relatively new customers who are not used to the extended length of time for delivery. They are feeling insecure because they are not from the area. I think they are reacting to that insecurity and I can’t blame them for it.”

But at least two of the customers from Asia are listed as wine investors, suggesting they have more than a casual knowledge about the wine business.

In the past, some employees have just tossed out delivery dates to customers to get them off the phone, said Fox. He has put a stop to that.


Premier Cru has been in business since 1980, according to the company’s website. It started out in Oakland, relocated to Emeryville, and then, in 2011, moved into a spacious, light-filled, award-winning building on University Avenue near Tenth Street. While the store has many customers who walk through the door, much of its business is with wine collectors from around the world who read about its offerings online or in its newsletters.

Premier Cru carries some of the world’s best — and most expensive — wines. For example, it is currently offering a three-liter bottle of a 2010 Mouton Rothschild for $3,615.

The wine is among vintages advertised as “pre-arrival.” Many wine collectors buy French Bordeaux while it is still aging in the barrel. It costs less at this time than when it is bottled. But to snare these futures, collectors must pay up-front and wait a few years before delivery.

It is the length of this waiting time that is the contentious issue in the lawsuits filed against Premier Cru.

Other high-end retail stores generally deliver their pre-arrival purchases within three years, according to some of the lawsuits. Premier Cru is often much slower than that. Lawrence Wai-Mun Hui said he had purchased 1,591 bottles of pre-arrival wine starting with the 2009 vintage and continuing through the 2012 vintage. He spent around $981,000 for the wine, including bottles of Haut Brion, Cheval Blanc, Mouton Rothschild, Margaux and Petrus, but has received fewer than 10 bottles.


Employees of Premier Cru kept telling Hui that his wine was on the way, but it never arrived. Meanwhile, some of the same kind of wine that Hui ordered is now available elsewhere.

“Many of the wines Hui ordered from Premier Cru are now widely available from other vendors at prices lower than what Mr. Hui paid Premier Cru up front,” according to a lawsuit filed in federal court in August. “For example, in August 2011, Hui pre-ordered 18 bottles of 2009 Cheval Blanc for $995 per bottle. This wine is immediately available for purchase online for less than what Hui paid. As another example, in March 2012 Hui ordered 24 bottles of 2009 Mouton Rothschild for $799 per bottle. This wine is available online for far less than Hui’s price from Premier Cru. None of these wines have been delivered to Hui nor has he been advised by Premier Cru that they are otherwise available.”

Hui asked for a refund but has not received one. Other unhappy customers have thought they worked out a settlement with Premier Cru, only to find that their check had bounced.

Chan Yu purchased $288,798 worth of wine from Premier Cru in 2011 and was told it would be delivered in 2013, according to a lawsuit. When the wine was not delivered, Yu demanded repayment. He received a check for that amount on March 16, but when he deposited it in April, the check bounced, according to the lawsuit. Yu filed his lawsuit against Premier Cru in June.

“There was definitely some cash-flow issues,” said Fox. “You are trying to pay suppliers and do cash refunds at the same time. … We have a bunch of refunds people have requested. We can’t take care of everyone all at once.”

Not all of the disgruntled customers are savvy wine investors. Andrew Matarese is a 25-year-old wine aficionado from New Jersey who says “he is living on the autistic spectrum.” He grew up in an Italian family and started getting interested in wine in college. Since then, he has earned a wine certificate and worked as an intern in a wine store in Massachusetts. He currently works for a wine importer.

Matarese said he started buying wine from Premier Cru about three years ago, lured by the prices it offered on some futures of 2012 French Champagne. While he didn’t have any problems getting wine that Premier Cru had in stock, he has not received about $12,000 worth of futures he ordered. Matarese has called and called and emailed the store demanding a refund, he said, but none has been forthcoming.

“They would tell me it was coming, blah, blah, blah,” said Matarese. “I would call to follow up on the Champagne and they would say it’s not in, or they can’t get it, or they can’t fill the order. They would offer store credit. [I told them] I don’t trust anything coming out of your mouth. I want all of my money back. I want all of my orders canceled.”

Matarese said if he doesn’t get a refund by Friday, he, too, will be filing a lawsuit.

After Berkeleyside contacted Fox he said he would refund Matarese’s money Thursday.

None of the attorneys who are involved in litigation against Premier Cru would speculate on why Fox and the store were so remiss is delivering futures. But there has been an active discussion about Premier Cru’s business practices on Wine Berserkers, an online forum, since 2012. Many of the commentators said they think Premier Cru never pinned down the futures they professed to sell, so the store couldn’t deliver the wine it promised.

(Update: After this story went to press, Matarese received a refund.)

Related:
Berkeley man at center of new book, ‘Tangled Vines’ (10.06.15) 
‘Tangled Vines’: A stunning look at the dark side of wine (10.05.15) 
Donkey & Goat workers face wine theft charges (10.05.15)
Nine Berkeley buildings wine design excellence awards (04.03.13)

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