Most of us love our wine, and when it’s time to pack up and relocate, dealing with our limited number of bottles is not an issue. Generally, movers will not transfer liquids as part of a standard load so it’s either pack it in your car trunk (if driving), consume the wine before the departure date, leave it behind or give it away. But what happens when you have a cellar of 200+ bottles to move?
From time to time, we are approached by clients seeking advice on how to balance corporate spending guidelines with a transferee’s request to have the cost of shipping their wine collection covered. We thought it may be a good time to share some insight on the implications of agreeing to such a request.
When transporting household goods, movers are often reluctant to ship liquids with regular household goods for liability reasons. There is always the possibility of breakage and damage to the rest of the shipment. In addition, wine is very susceptible to spoiling when being shipped; it requires a controlled environment to protect it from fluctuations in temperature, humidity and light.
If a moving company will not accept to move the collection or does not have the appropriate means of doing so, the alternative is to use a specialized transportation company to handle the packing, crating and shipping of the wine. Either way, agreeing to ship an employee’s wine collection implies significant additional cost. For example, strictly from a weight perspective, if there are 500 bottles, at approximately 3 lbs. per bottle, that’s an additional 1,500 lbs. on top of the weight of the regular household goods. Then there are the extra requirements, such as a controlled environment, specialty packing, an appraisal, insurance, etc.
Other costs to consider, particularly if an international move, are taxes, duties and levies that will be applied on the volume exceeding the maximum allowed duty-free. In some cases, there may be a need to apply for an importing permit. Navigating these laws, regulations and documentation requirements, can be quite onerous, as well as expensive. Even between provinces and US states there is legislation that needs to be adhered to.
Although not common, some organisations will agree to move wine collections. The question is: should the employer cover the entirety or only part of costs related to what many would call an “extravagant” hobby. And even if the cost is to be covered, the governing legislation may only allow part of the collection to be shipped. Should the transferee be compensated for any part of the collection not eligible for transfer?
If employees with these large wine collections are asked or required to relocate, they may well adopt the position that the organization should either pay for its shipping and/or specialized storage, or compensate them for any loss. The decision as to whether to agree to cover any portion of these costs may depend on a variety of factors, for example:
– the type of relocation (e.g. long term temporary versus permanent),
– the employee category (e.g. executive versus mid-level management or other),
– the destination (domestic versus international), or
– the employee’s specific experience and expertise (i.e. is that employee key to the achievement of the organization’s objectives).
Many organizations provide a miscellaneous expense allowance for move-related costs not specifically covered by the relocation program and may instruct the employee to use it to cover the shipment of their wine. Others who offer a flexible spending account for non-core elements of the program may specify that it be used for this purpose. Another option could be to offer a flat amount toward the cost, with any balance to be covered by a miscellaneous allowance or flexible account. In all these scenarios, while funds are provided, they may be at the expense of other needed services… the idea is that the transferees assumes part of the responsibility and the organization is able to contain its costs.
Each organization must decide for themselves whether or not they are willing to take on this expense. Having all the information (legal, financial and administrative) beforehand is critical to avoiding confusion and unintended costs, not to mention any serious conflicts that often arise when possessions of high value are at play.