What is En Primeur?
En primeur, also known as wine futures, is a way of purchasing wine 18 months before it is bottled. This system is most commonly associated with Bordeaux for the sale of classed growths. The wines are sold in the spring following harvest, while the wines are still in barrel. The idea is to allow consumers to secure hard-to-buy wines at a lower price, while the estates benefit from early payment.
The contemporary en primeur system dates back to after the World War II when chateaux were struggling financially. Although, it was really not popular until the 1970s and later during the great 1982 vintage that it really took off.
Every April, nearly 6,000 wine professionals are invited to Bordeaux to taste and assess the wines in barrel. The chateaux then release their prices from May to June. Usually, the chateaux, through negociants, puts up a small tranche of wine for sale. The first tranche is indented to gauge what the market will pay. Depending on how it sells, the price is adjusted for the following tranches. During this time journalists publish their review scores, which guides the consumers in purchases wine through fine wine merchants.
The most sought after wines will be on allocation with the negociants and trade buyers, who will be forced to buy in less good vintages or risk losing their allocation.
The wines are bought for an en primeur price that includes the bottles wine being delivered to the storage of the retailer the following year. This price is ex celler, meaning it excludes any taxes or duties that will be due at the buyers home market. These wines are often left in a secure storage unit for many years, until the final buyer is ready for delivery. Bordeaux (particularly First Growths) account for the largest proportion of wine traded on the secondary market.
There is a continuing debate as to whether the en primeur system still works. In the boom period of the 2000s, mainly due to Chinese demand, en primeur prices rose significantly, even in relatively poor vintages, such as 2011. Prices started to fall and those many who invested had lost money. Various critics have expressed concern about how their reviews influence the market, given that the wines they are tasting are not the final wine.
In 2012, Chateaux Latour announced it would no longer sell wines en primeur and several chateaux have since reduced the volume they sell in this way.
Advantages vs Disadvantages
- Ability to secure highly saught after wine at low prices.
- Option to keep or trade these wines.
- Wines are bought on the opinions of journalsits tasting unfinished barrel samples that may not refect the final wine.
- Intermediaries could go out of buisiness before the wine arrives.
- Prices may fall after purchase.