The origins of En Primeur
Wine Futures: An overview of Bordeaux En Primeur
En Primeur, also known as ‘wine futures’, is a French term that translates to ‘first release’ and is a practice in the wine industry that dates back to the early 20th century. The system allows wine lovers and investors to purchase wine while it is still in the barrel, before it is bottled and released to the market. En Primeur is particularly important in Bordeaux, where it has become a cornerstone of the wine trade.
Origins of Bordeaux En Primeur
The origins of Bordeaux En Primeur can be traced back over 60 years. At the time, winemakers in Bordeaux would sell their wine in barrels to wine merchants, who would then do blending and bottling before selling it on to customers. This system worked well, but it meant that the winemakers had to wait until the wine was bottled before they received payment, which could be several years after the grapes were harvested.
After the Second World War, France’s wine business was struggling, producers were underfinanced and recovering from several years of conflicts. To address this issue, some of the most influential wine merchants (négociants) came up with the idea of selling the wine in barrels to customers before it was bottled. The system allowed the négociants to exercise control over pricing and to obtain their desired volume of wine at reduced rates, while simultaneously providing upfront cashflow to the chateaux helping to alleviate their financial difficulties. The customers also benefited – they would normally purchase wine at a lower price than they would pay after the wines were bottled and released onto the market.
How En Primeur works in practice
The En Primeur system is now well established in Bordeaux and typically takes place in the spring following the harvest. Wine merchants and critics are invited to taste the wine from the previous year's vintage, while it is still in the barrel, and then place orders for the wine they want to purchase. There are several factors that can influence its release price: the quality of the vintage, the demand for the brand, critical appeal, and market conditions. Once the orders are placed, the winemakers begin the process of blending and bottling the wine, before shipping it to merchants. The wines usually become physically available after 18-24 months.
Advantages of buying wine futures
Buying wine futures has several advantages. One of the main advantages is the ability to secure allocations of wines that are in high demand. By buying En Primeur, collectors can avoid missing out on their favorites.
Another advantage is the potential for price appreciation. Bordeaux wines have a long history of increasing in value over time, and the best wines from the best vintages can provide excellent returns. For example, the 1982 vintage of Château Lafite Rothschild has increased in value by over 6,150% since its release.
Risks of buying En Primeur
While the potential for price appreciation is high, there is no guarantee that the wines will increase in value. If stock remains unsold, collectors can often find wines with considerable bottle age at the original release prices or lower. Some examples include wines from the 2006 and 2011 vintages.
There are also upfront costs involved. The wines are typically sold in large quantities, and the prices can be high, which can make it more difficult for smaller collectors to participate in the En Primeur market. Moreover, the wines would need time in the cellar before they are ready to drink, adding extra storage costs to the final bill. Many of the wines often have a recommended drinking window of 5-50 years or more, dependent on quality.
En Primeur beyond Bordeaux
The success of the En Primeur system in Bordeaux has led to somewhat of a global following. Wine producers in other parts of the world have adopted the early release model, including annual En Primeur campaigns in Burgundy and the Rhône.
Meanwhile, La Place de Bordeaux, the prestigious distribution network that handles Bordeaux En Primeur, has expanded its operations to include wines from the New World. This expansion has been driven by the growing demand for high-quality wines from other regions and has benefitted producers who have been able to build a brand. Last year, over 100 non-Bordeaux wines from more than 32 different wine regions were released through La Place.
Final thoughts
The success of the En Primeur system in Bordeaux has led to somewhat of a global following. Wine producers in other parts of the world have adopted the early release model, including annual En Primeur campaigns in Burgundy and the Rhône.
Meanwhile, La Place de Bordeaux, the prestigious distribution network that handles Bordeaux En Primeur, has expanded its operations to include wines from the New World. This expansion has been driven by the growing demand for high-quality wines from other regions and has benefitted producers who have been able to build a brand. Last year, over 100 non-Bordeaux wines from more than 32 different wine regions were released through La Place.
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