In today’s world, cryptocurrency and NFTs are dominating the conversation surrounding speculative investments and collectibles. Even wine is finding a foothold in the digital world, particularly with companies like Vinovest. But before online wine portfolios, there was (and still is) en primeur. Post-WWII, many struggling Bordeaux châteaux began selling wine before bottling as a way of shoring up cash. It was a way to fund the following year’s harvest. That practice laid the groundwork for what we know today as en primeur.
En Primeur Wine in a Nutshell
Directly translated, en primeur means ‘first’. It’s a speculative method of purchasing wine still in the barrel. It’s also known as wine futures. Buyers can secure high-quality wines that are expected to appreciate several years before they hit the open market. In turn, it also generates cash flow for the producer.
The practice of en primeur dates back to when Bordeaux negociants (merchants) visited regional châteaux to purchase grapes off the vine.
Today’s modernized, more formal system is a week-long tasting event hosted each spring by the Union des Grands Crus de Bordeaux (UGCB) in Bordeaux. The annual gathering offers the first glimpse into the quality of the vintage. It’s an essential gauge of the industry’s first impressions.
Pros & Cons of Buying En Primeur Wine
Acquiring wines en primeur allows investors several advantages. First, it undoubtedly secures the best price. It also enables the purchase of limited production wines that may be scarce in the marketplace upon release. Another significant advantage, it ensures the origin of the wine since many châteaux arrange shipping directly.
There is an element of risk, however. There is no guarantee an en primeur wine will appreciate over time. As with any speculative investment, it could even lose value.
Critics of the system cite that presenting wines in their youth doesn’t allow for proper assessment and rating of the vintage. Further, the Bordeaux negociant system can be complex to navigate, rewarding those with purchase history. As a result, it’s difficult for new buyers to access the best offers, even in sub-par vintages.
How the System Works
During en primeur week, renowned cru classé producers present barrel samples for the international wine trade to taste and rate. The châteaux then releases a tranche, or portion of their total production, at an opening price with strict allocation. Merchants send their en primeur offers with the ratings and tasting notes to retailers, importers, and private buyers. If a buyer accepts an offer, they pay the negociant directly while the wines are still in the barrel.
After the wine is bottled, typically within 2 – 3 years of purchase, châteaux ship the wines to bonded warehouses. The purchaser generally has the option to pay applicable duty and VAT taxes and have the wines delivered to their home, or they may elect to store the wines tax-free at the warehouse. Generally, warehouses charge an annual storage fee. Duty and VAT taxes are applied when the wine is delivered or sold.
En Primeur Outside of Bordeaux
While en primeur week in Bordeaux remains the gold standard, other producers in regions such as Burgundy, Tuscany, Piedmont, and Napa Valley have also adopted versions of offering wine en primeur.
For example, Burgundian producers host Domaine tastings and conduct events like Bourgogne Week in London, Hong Kong, and Tokyo. Typically held in January, producers invite select clients and journalists to taste barrel samples of Burgundian wines with approximately 15 months of age.
How To Buy En Primeur Wine
Whether buying stocks, art, cryptocurrency, or en primeur wine, the same investment strategies apply. En primeur wine offers from top producers are highly allocated. As more markets open, the allocations continue to shrink and drive pricing higher.
Seek smaller, up-and-coming châteaux who may offer a great vintage at lower prices, providing greater returns in the long run. Research vintages and châteaux and look for those that offer a consistently high-quality trajectory.
The odds of getting your hands on collectible wines for the first time are slim. Buyers that are often successful have a purchase history with a specific producer or a strong relationship with a wine merchant. With that being said, some en primeur wines are available online via Millesmia and west coast retailer Wally’s Wine Market.
For those interested in advanced research tools and investment management, Vinovest blends the knowledge of Master Sommeliers with AI technology to curate your wine portfolio. Perhaps one hedge wine has an advantage over other investments; whether the value increases or decreases, you can always open the bottle and drink the wine!