20 January 2018 A slightly shorter version of this article is published in the Financial Times magazine, a companion piece to this news article. See also OW Loeb – a history lesson.
On the afternoon of 16 November last year, Christie’s did a very unusual thing. Part way through a sale entitled ‘Finest& Rarest Wines from a Superb Collection Part 1’, it announced that all further lots were being withdrawn. ‘Today’s wine auction was being conducted on behalf of a secured creditor of the owners of the private collection offered. Christie’s has just received notice that this debt has now been paid.’
The wine collection, the second half of which was supposed to have been auctioned in Hong Kong a few days later, had been offered as security against a personal cash loan to London restaurateur Marlon Abela (see Nick's rather prescient 2004 profile of him), owner of The Greenhouse, Umu, Morton’s and now The Square, a collection sporting no fewer than five Michelin stars. It is generally acknowledged in the restaurant business that the higher the ranking, the harder it is to make a profit. (Abela also acquired a share in Simon Parker Bowles' St James's wine bar Green's; it is no longer operating.)
Abela, son of a hugely successful Middle Eastern businessman, a knowledgeable wine and food lover and a regular feature on The Sunday Times Rich List, likes to spend time in his luxurious dining empire. But he has proved less enthusiastic about visiting the premises of his wine companies – at least that has been the experience of his former employees at OW Loeb, the wine merchant he bought at the end of 2014.
OW Loeb is one of the great names of the international wine trade and will be a name familiar to many wine lovers today. In the 19th century Sigmund Loeb was one of Germany’s most celebrated wine merchants and president of the Moselle Trade Association (see Jewish heritage in German wine culture in your Oxford Companion to Wine, 4th edn for more). His son Otto made London his home from the 1930s and played an important part in the early years of Glyndebourne Opera for instance, introducing the company to the delights of German wine.
In the 1950s, OW Loeb sought financial backing from Yorkshire businessman and connoisseur David Dugdale, who finally took over the company in 1976. He and managing director Anthony Goldthorp had picked out the plums of the Rhône and Burgundy so effectively, from the very early 1960s, that OW Loeb was the second-oldest export customer (after Frederick Wildman of New York) of Domaine Armand Rousseau, whose wines the world’s burgundy lovers would practically kill for nowadays.
In 1997, David Dugdale passed on the company, also dealing in fine Bordeaux and German wines, to Christopher Davey and Brough Gurney-Randall, wine lovers who had long worked together and enjoyed being the bridge between top growers and appreciative private customers. Recently, well into their sixties, they decided to sell OW Loeb and Abela seemed the ideal owner. He gave every impression of having the deepest of pockets and seemed well-positioned to take the venerable company to the next stage.
Abela already had a wine trading company that supplied his restaurants, MARC Fine Wines run by Patrick Headlam since 2005. The plan was for Headlam, Davey and Gurney-Randall to work together in Loeb’s Bermondsey premises, which they did most effectively for the first year or so, assembling a crack team of almost 20.
Cynics like me, knowing Abela’s personal penchant for the finest of wines, thought that his motivation for buying Loeb might be to get his hands on the company’s precious allocations of some of the wine world’s greatest names, wines MARC Fine Wines could only dream about. What we didn’t foresee was that this once-great company would quickly hit controversy with a spate of resignations and disputes over payment.
In January last year, OW Loeb held its annual en primeur burgundy tasting as usual, showing off the popular 2015 vintage. Orders from the swelling ranks of burgundy lovers flooded in, along with cash from those expecting to take delivery of their 2015s in the next few months. A similar tasting and offer of German 2016s was made in June.
But as the year progressed it became increasingly apparent that some growers, the producers of these wines, were not being paid as usual. The frequency of emails and calls from worried growers increased to such a pitch, and working at OW Loeb became so demoralising, that by the autumn the majority of staff, including the three most senior principals, had resigned. There seemed to be no reaction to these resignations from the MARC group’s head office above Abela’s Japanese restaurant Umu in Bruton Place.
One of the last to leave was Nicola Franklin who had been with OW Loeb for 10 years and was impelled to stay by a sense of loyalty to the growers she had come to regard as friends. ‘I felt absolutely powerless,’ she says now. ‘The problem was the reluctance of head office to release cash to pay growers – and the fact that there were so many resignations... We had no way of knowing who had been paid and who not. I also felt huge loyalty to my customers and tried to push as much wine as possible into customers’ reserves.'
Some of the producers were owed five-figure sums. The worst hit were the least grand. Some in the less glamorous Mâconnais region worried they might not be able to afford to pick the 2017 harvest. A number resorted to threatening litigation.
Eventually, at the beginning of last November, worn down by the stress of dealing with distressed growers, Franklin too resigned.
One of the company’s brightest young stars, admired taster Jack Chaddock, has in the last few weeks been working from his kitchen table, doing his best to unite customers with their orders – even though he has been offered a job by a rival firm and is no longer on the Loeb payroll.
The legal situation is that once wine is moved to a customer’s personal reserve in a UK warehouse and identified with their name, it is their property. OW Loeb’s customers’ reserves are kept at London City Bond’s Dinton site outside Salisbury in a reconditioned munitions store. (See our free international guide to Where to store wine, fully updated last year.)
Last autumn Abela was so keen to continue the tradition of offering samples of the latest vintage of burgundy to drum up new orders that Vintners’ Hall in the City of London was booked for the Thursday of last week’s Burgundy Week, as he assured me in mid-November. When I was in Burgundy late last year, those I spoke to said that no one from Loeb had set foot there for months, so no wines had been tasted and chosen for an en primeur offer of 2016s. (Abela says that his team have recently been tasting there.) The Loeb 2016 burgundy tasting was eventually cancelled.
There is still an enormous amount of 2015 burgundy sitting in producers’ cellars waiting for payment.
The week before Burgundy Week this January, there appeared to be no one at the Bermondsey premises and the Loeb phone number rang off the hook. According to Abela this was because an office move was under way. Once concern about the state of en primeur orders from Loeb began to be expressed in this thread on our members’ forum, an answering machine was put in place – although it rapidly filled up with messages. Abela recently installed a handful of staff at head office, following this up with a public announcement that ‘OW Loeb returns to Mayfair’. His grasp of either the company’s history, or London geography, appears a little shaky. (OW Loeb have been based successively in the Adelphi, Jermyn Street in St James's, Southwark and Bermondsey.)
He has been busy. He emailed OW Loeb suppliers last week to update them on developments and inform them of his unusual policy of holding back a portion of some of the wines bought en primeur. Indeed, the most recent price list on the Loeb website, dated September 2017, offers vintages 2013, 2014 and 2015 from certain even quite renowned domaines.
During Burgundy Week, it was apparent that some producers were already forming alternative alliances with other UK wine importers.
Abela has generally rejected the criticisms levelled at Loeb. He says he has invested significant sums in the business and pursued a change in strategy to introduce wines to new restaurant clientele in what he considers to be the interests of the domaines. He added: ‘We have every intention of continuing our commitment to OW Loeb. In particular we have no intention of defaulting on payments and as far as we are aware all payments are being processed to be paid.'
He later added by email, 'OW Loeb intends to honour its commitments, is in the process of doing so and if it cannot deliver a particular wine for any reason it will offer suitable alternatives or reimbursement. I say this because, as you know, not all 2015s have been delivered across the market. We are still waiting to land some of our wines and our team will be in touch with our private clients once we have received all the wine, to arrange for delivery or transfer as per their instructions.'
The tip-top domaines are unlikely to suffer anything more than inconvenience; they could sell any wine allocated to Loeb 10 times over. I sincerely hope that individual customers who thought they had bought specific wine futures from Loeb will be as fortunate. But the reputation of a once-great wine company seems severely challenged by the business practices of a particularly privileged outsider. And none of this will inspire confidence in buying wine en primeur, handing over cash many months before likely delivery, a system on which so many wine merchants depend.
