4 min read
Beyond wine: fuel, yards, tenders and new builds
The same line applies wherever a percentage can attach to money spent for someone else. Where to look, and the questions to ask.
For:Crew and captainsCharter and sales brokersManagement companiesOwners and guestsSuppliers and vendors
Wine and provisions are the easy example, because the sums are frequent and the incentives are visible. But the principle is the same wherever a trusted person chooses a supplier, and the supplier pays them, in secret, for the order. It does not stop at the wine list.
What follows is not a claim that any of this is widespread or that any named person does it. It is a map of the places where percentages commonly attach to other people's money, and therefore where disclosure matters most.
The principle again
Money spent on behalf of an owner, a charterer or a guest is spent by an agent. A benefit paid to that agent by the supplier, which the owner or charterer has not been told about and has not agreed, is a problem wherever it happens, whatever the product.
Disclosed, agreed commissions are normal. The test remains: was the person whose money it is told, in advance, and did they agree? See Commission or kickback?.
Where to look
| Area | What can happen | Questions to ask |
|---|---|---|
| Fuel and bunkering | A supplier pays a captain, manager or agent a rebate or fee per tonne or litre, or a "service fee" built into the price. | Who is paid on the fuel? Is any rebate on the owner's invoice? Were other quotes obtained? |
| Port, agency and marina services | An agent's fee, a berth surcharge or a "facilitation" payment that finds its way to a decision-maker. | Is the agent's fee in a written agreement, and visible to the owner? Who else receives a share? |
| Shipyard, refit and paint | A percentage on the work paid to the person who chooses the yard or contractor, or who approves variations. | Who recommended the yard? Is anyone paid by it? Is the full contract and every variation visible to the owner? |
| New builds and sales | A commission shared with the owner's captain, manager or representative on a sale or build, without the owner's knowledge. | Who is receiving a commission, and who has agreed to it? |
| Tenders, toys, electronics, interiors | A "thank you" paid to whoever specifies or orders equipment. | Who specified it? Was it compared? Is any benefit paid to them? |
| Surveyors, designers, naval architects, legal and insurance referrals | A fee from the party who benefits, paid to the person who recommended them. | Who recommended them? Are they paid by anyone else for the introduction? |
| Crew placement and recruitment | A fee, paid by the agency to the person who selects it. | Who is paid, and by whom? |
| Wine, provisions, florals, laundry and other everyday supplies | The best-known example. | As above. |
What commentary says
A 2017 SuperyachtNews article, "Kickback… and relax!", reported brokers' criticism of undisclosed commission-sharing between brokers and captains on yacht sales. One broker was quoted as saying: "Ultimately, it is a big transparency issue, because it's a violation of your fiduciary relationship with your employer." The same piece reported that both brokers accepted commission-sharing where the owner knows and consents. That is the line this site draws.
A guide to yacht management fees published by a cost-calculator website warns that "some management companies receive volume rebates from fuel suppliers, chandleries, and marinas — and keep them rather than passing savings to owners." It is a general statement from a low-authority source and we cite it only to illustrate the point: rebates are not the problem. Keeping them without telling the owner is. See the references for the sources and their limits.
Owners: what to do
- Ask for a written list of everyone who receives a fee or benefit on any significant spend: fuel, yard, equipment, agency. Use the owner's letter.
- Ask who recommended each supplier, and whether they are paid by anyone for it.
- Insist on seeing the invoices and the credits, and where each rebate went.
- Consider an independent owner's representative or auditor for large projects, who is paid by you and no one else.
Crew, captains and managers: what to do
- Disclose any rebate or benefit a supplier offers to the owner, and let them decide.
- Pass on every discount to the owner's account. A rebate is the owner's money.
- Compare quotes and keep them.
- Decline benefits personally. Do not accept a "thank you" for sending business.
Suppliers: what to do
- Offer the owner a visible discount rather than a hidden payment to the person who chooses you.
- Publish your prices and your policy.
- Say so to every customer: "We don't pay anyone for an order."
- Make the Vendor Promise.
General information, not legal advice. See the disclaimer.
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