Behind the Doors of the En Primeur
Anticipation. Excitement. Speculation.
Be it fashion, real estate or the stock market, the question is always this: what’s going to be the next big thing? What do you buy and when do you sell? How can you predict the next season’s trends? Across the board producers, traders and consumers can only hope they bought into the right stock.
The wine industry is no exception. Welcome to the world of wine futures.
En primeur: How it works
The term you should be familiar with is actually en primeur. Think of it as wine speculation and investment. Buying wines en primeur is the practice of buying wines while they are still in the barrels, before they are even bottled. Though many chateaux all over France and vineyards around the world have begun to offer en primeur in the past few years, it is really in Bordeaux where this has been practiced for centuries.
In the spring after the grapes are harvested and the wine is made, chateaux will make samples available for tasting. Writes the Wine Cellar Insider, “For 5 days, thousands of journalists, merchants, tasters, amateurs and more than a few freeloaders will descend on Bordeaux for the week to taste the new 2013 Bordeaux vintage.” Charles Metcalfe of the Telegraph writes, “So we writers and merchants belt around Bordeaux (for me, almost 930 miles in the course of the week), desperate not to miss our precious 15-minute appointments with top estates. We taste, we write, we drive on to the next estate, and the wine importers do the same. And when the estate owners decide on the selling price for their wines, probably some time between now and June, a flurry of offers will crowd your email inbox and thud on to your doormats.”
Though initial prices may have been set for the wines, those numbers can change drastically depending on reviews and ratings by the various experts. The chateaux will release a proportion or “tranche” of their total production to wine brokers called “négociants,” who will sell the en primeur offers. When you buy en primeur, you pay the opening price to your merchant. The bottles are usually released in the spring or summer about two years after the offer. Once you have paid the additional shipping costs and duties, the wines will be delivered to you.
But why buy en primeur at all? In “The Past and Future of Bordeaux’s ‘en primeur’ System,” writer Mike Supple says, “Consumers participate in the en primeur system for two main reasons: securing small production wines and saving money. Some chateaux produce a very small amount of highly sought wines, and the entire production disappears quickly. Buying these wines en primeur gives the savvy consumer a chance to secure wine otherwise impossible to find. Other expensive and highly collectible wines also often greatly increase in value between the en primeur price and market prices 5 – 10 years later. By purchasing en primeur, the consumer has an opportunity to purchase wines otherwise unaffordable, as well as sell the wines for profit years later.”
Think of these wines as a high value commodity, in high demand, but with low volume. JJ Buckley Fine Wines advises, “If you have a favorite wine, remember that buying en primeur is your best chance to secure half bottles or large formats. Wineries traditionally only bottle as much wines as needed to fulfill orders for alternative formats placed en primeur.”
The En Primeur Campaign
A visit to any region of France is the dream of a lifetime, but Bordeaux is a particular ambition of all wine lovers. Some travel agencies organise wine tours in Bordeaux during the harvest, allowing visitors to try their hand at picking grapes. But being in Bordeaux during the en primeur campaign is nirvana for the true wine professionals, rather like being in the Milan or New York Fashion Week for style mavens.
Ben Grosvenor of Ditton Wine Traders writes, “Every year, merchants and buyers alike get excited about the prospect of en primeur, even in lesser vintages – for merchants, an opportunity to go and try the new wines that the Chateaux have spent the past year working hard on producing, chatting to the owners about the vintage; its difficulties and challenges, and then trying to gain an understanding of it all. For buyers, it’s an opportunity to listen to what their merchants have to say about the wines, and hopefully pick up some well-priced wines that won’t be ready for two years at least.”
But it is also very competitive, very tightly scheduled, and very tense. Chateaux, négociants and critics disagree—sometimes rather loudly—over the timing of releases, the announcements of notes and scores, and the pricing. Mark Schuringa writes, “This is a market where 200 Chateaux talk to 20 courtiers who talk to 200 Negociants. Max.” It is such a controversial market that many critics say the entire en primeur system is outdated and badly managed, and should be abolished. In fact, one chateau stopped selling en primeur in 2011.
Many have weighed in on the pros and cons of the en primeur system. Should the practice persist in the years to come, one can be sure that the Asian wine market will strive to be a part of it. With new establishments such as the Singapore Wine Vault and exciting annual events such as the Cathay Pacific Hong Kong International Wine & Spirit Competition, surely Asian wine collectors will also be buying en primeur soon.
Those who do buy en primeur would do well to store their collection at the newly-opened Singapore Wine Vault, located along the Fishery Port Road. It is the largest wine storage facility in Southeast Asia, designed to hold 10 million wine bottles in strict temperature-controlled conditions. It also offers the Drôme, a section dedicated to private wine cellars designed to be completely customizable to the client’s specifications.