INVESTING - 4 MIN READ
The Ultimate Guide To En Primeur Wines
Wondering what en primeur wines are and how to invest in them?
En primeurs or wine futures are a great way to buy sought-after vintage wines before they even get bottled.
How does it work?
And, is it worth investing in en primeur wine?
In this article, we’ll tell you all about this unique wine investment route - how it works, how to approach it, and much more. We’ll also show you the easiest way to invest in en primeur wines!
This article contains:
(Click on the links below to go to a specific section)
- All You Need to Know About En Primeur Wines.
- How to Approach Buying Wine En Primeur.
- Is it Worth Buying Wine En Primeur?
- Invest in En Primeurs and Wine Bottles Through Vinovest.
Let’s do a deep dive.
All You Need to Know About En Primeur Wines
So, what is en primeur wine?
En primeur is the French wine trade term for wine futures (or wines “in their prime”). It’s the method of buying wine while it is still in the barrel.
This system dates back to the 18th century when Bordeaux negociants (merchants) visited the local or regional chateaux (wine estates) before harvest to buy Cabernet or Merlot grapes off the vine.
However, the modern-day en primeur system was institutionalized in the 1970s with the Bordeaux en primeur tasting week.
Which Wines are Sold En Primeur?
The most popular en primeur wines are from the renowned wine regions of Bordeaux and Burgundy.
You’ll also find chateaux in Napa Valley, Rhone Valley, and Tuscany adopting this practice.
There are many advantages to buying vintage wines in the barrel. Let’s explore them.
Benefits of Buying En Primeur
En primeur wines are way cheaper than the vintage wine bottle when released, giving you a higher profit margin.
It also gives you the chance to own limited-edition Bordeaux or Burgundy wines that are tough to get hold of once released.
You could invest in en primeur wines for various reasons:
- Purely for investment or to sell and make a profit.
- Out of emotional attachment to certain chateaux.
- To build a rare wine collection (including limited editions made in chateaux in sought after regions like St Emilion).
- To buy wines at the cheapest rates for drinking.
- To buy a case in an unusual format -single (1.5 liters) or double magnums (3 liters).
And, how does this help a grower or a winemaker?
En primeur sales provide the chateau with earlier cash flow and guaranteed sales of the vintage. It also lets them finance the year’s harvest, and improve vineyard operations at the chateau.
How Does the Process Work?
Here’s how the en primeur wine system typically works (especially in Bordeaux and Rhône):
- En primeur tasting: At the start of spring - after malolactic fermentation of wine - some chateaux (like Domaine Leflaive, Chateau Petrus in Pomerol, or Château Beaucastel, Chateauneuf Du Pape in Rhone Valley) organize an en primeur week. This includes a tasting of young barrel samples of the previous year’s harvest.
Wine critics taste these (6-7 month old) samples and assign ratings to each. These tasting scores reflect the expected quality of the Bordeaux vintage once bottled.
- Sale to merchants: The chateaux then release a portion of their production at an opening en primeur price (release price) to negociants (merchants).
Note that in Bordeaux, this ecosystem of chateaux, brokers, and negociants is called la Place de Bordeaux or the Place de Bordeaux system.
- Offers to buyers: The merchants send offers to their customers (importers, retailers, and private buyers) along with tasting notes.
- Purchasing the wines: You would pay the wine merchant when you accept the primeur offer. Remember, this is more than a year before the chateau releases the vintage to the market.
Typically, you can only buy 75cl bottle cases of 12 bottles or 6 bottles.
- Delivery: Once bottled (usually within 2-3 years of buying en primeur), your wines are shipped by the chateau to bonded warehouses in your country. The merchants then deliver them to you or sell them on your behalf.
How Does Burgundy’s En Primeur Work?
The en primeur system in Burgundy is much more informal (as compared to the elaborate en primeur campaign in Bordeaux).
Producers host domaine tastings in Burgundy, and conduct events like a “Burgundy Week” in London or Tokyo.
Is the Bordeaux system still relevant?
Some wine experts suspect that you may no longer get steep profits from Bordeaux en primeur wines as the prices are higher than before.
Some cru classe chateaux in Bordeaux simply want to cut out the middlemen. A few other Bordeaux chateaux prefer to discontinue their en primeur campaign.
Not just Bordeaux, the en primeur system itself has its share of critics.
Criticisms Against the System
According to a few commentators, the main drawbacks of the en primeur system are:
- The Bordeaux wine or any others you taste in the chateau are too young to be assessed properly (say, to gauge the perfect blend of tannin, alcohol, and acidity.)
- The Bordeaux negociant system (or Place de Bordeaux) has become too complex to navigate.
- There’s no guarantee that your Bordeaux or Burgundy en primeur wine will appreciate over time - some of them could even lose value over time.
No wonder it is referred to as a delicate method of investment!
Rest assured, you will find value in your wine futures, including Bordeaux en primeur wines, if you pick them carefully. (We’ll tell you how. Read on.)
Now, you may wonder:
How Much Does it Cost to Buy En Primeurs?
You can buy any en primeur wine at in-bond prices (the cost of delivering the wine bottle to a bonded warehouse in your country).
On arrival into the warehouse, you have two choices:
- Pay duty, VAT and delivery charges, and get it delivered to your wine cellar at home.
- Or, you can have it stored in the warehouse, tax-free until the wine is delivered or sold. You’ll have to pay an annual storage charge, which covers insurance. Duty and VAT are also payable when the wine is released.
How much is wine duty?
The wine duty you pay is based on the strength of the wine and whether it’s still or sparkling.
Let’s take the UK as an example:
The wine duty of still wine of strength 1.2 - 4% is 0.91 pounds per liter.
For sparkling wine of strength 5.5 - 8.5%, the duty is 2.88 pounds per liter.
And, VAT is 20% on the cost of wine after duty.
Let’s look at how you should go about buying the right en primeur wines.
How to Approach Buying Wine En Primeur
Here are some essential tips to remember when you buy En Primeur wines:
- Differentiate between wines that’ll appreciate and those that will not.
- Choose the great wine primeurs that are well-backed by critics.
- Choose those that are re-tasted in the bottle and whose wine ratings are reconfirmed by wine professionals.
- Apart from the renowned wine regions, you should look at smaller, upcoming chateaux as well. You may get hold of a great vintage at lower prices, giving you better value in the long run.
- Look for those chateaux that have a high quality trajectory.
- Beware of scammers and only buy through reputed merchants whom you trust.
- Once you get the bottle, you need to store it under perfect conditions.
Most importantly, consider this...
Is it Worth Buying Wine En Primeur?
Buying en primeur wine doesn’t necessarily mean that you’ll make a profit.
But, identify the right wines, and you’re sure to get handsome returns.
So, you should consider Bordeaux futures and other en primeurs from Chateau Nenin in Pomerol, Chateau Courac or Chateauneuf Du Pape in Rhone Valley as part of your diverse wine portfolio.
Now, the whole process of en primeur investing may seem like a complicated one.
It will be far easier to entrust a wine investment company like Vinovest to buy and manage your portfolio of en primeur wines and wine bottles!
How do you do that?
Invest in En Primeurs and Wine Bottles Through Vinovest
Vinovest lets you invest in a curated portfolio of en primeur wines and fine wine bottles to reap the benefits of the wine market.
How do you invest in en primeur wines and wine bottles through Vinovest?
All you need to do is follow a simple process:
- Sign up on the Vinovest website.
- Answer a questionnaire on your investment preferences and risk appetite.
- Add funds to your account.
- Track your portfolio as it grows over time.
Benefits of investing via Vinovest
Vinovest chooses, authenticates, purchases, stores, and sells investment-grade en primeur wines and wine bottles for you.
Here are some of the benefits:
Curated Portfolio of Wines Including En Primeur
You get a balanced portfolio of wines that includes handpicked en primeur wines from reputed chateaux. This portfolio is curated by a fine wine team of an Advanced Sommelier and three Master Sommeliers - aided by Artificial Intelligence-based investment models.
Buy and Sell your wines easily
You can easily buy and sell wines using Vinovest’s intelligent online platform.
Vinovest stores your wines in bonded warehouses under optimal humidity, light, temperature, and vibration conditions.
Easy Delivery of Wines
Once your wine reaches the bonded warehouse, you can have the Merlot, Cabernet Franc red wine, or Cabernet Sauvignon bottle delivered to counterparty buyers, or yourself, whenever you wish.
All you need to do is fund your account, and pay a 2.85% annual fee (2.5% for a portfolio above $50,000). This fee includes buying wines, wine fraud detection, storage, insurance, portfolio management, and selling.
You get full ownership of the wines you buy.
Buying wines en primeur is a great way to build your profitable collection of rare wines - despite the element of risk involved. But, navigating the process might be complicated.
Instead, you can easily invest in a high-growth portfolio of en primeur wines and wine bottles through Vinovest.
Sign up now, and create your wine investment portfolio right away!