''En primeur'' or "wine

futures Futures may mean: Finance *Futures contract, a tradable financial derivatives contract *Futures exchange, a financial market where futures contracts are traded * ''Futures'' (magazine), an American finance magazine Music * ''Futures'' (album), a ...

", is a method of purchasing

wine Wine is an alcoholic drink typically made from fermented grapes. Yeast consumes the sugar in the grapes and converts it to ethanol and carbon dioxide, releasing heat in the process. Different varieties of grapes and strains of yeasts are m ...

s early while the wine (a

vintage Vintage, in winemaking, is the process of picking grapes and creating the finished product—wine (see Harvest (wine)). A vintage wine is one made from grapes that were all, or primarily, grown and harvested in a single specified year. In certa ...

) is still in the barrel. This offers the customer the opportunity to invest before the wine is bottled. Payment is made at an early stage, a year or 18 months prior to the official release of a vintage. A possible advantage of buying wines ''en primeur'' is that the wines may be considerably cheaper during the ''en primeur'' period than they will be once bottled and released to the market. However, that is not guaranteed and some wines may lose value over time. Wine experts, like

Tom Stevenson Tom Stevenson (born 1951) is a British wine writer and critic. Described by his colleagues as one of today's most prolific wine authors, Stevenson is regarded as the world's leading authority on Champagne.christies.coChristie’s Champagne Ma ...

, recommend buying ''en primeur'' for wines with very limited quantities and will most likely not be available when they are released.T. Stevenson ''"The Sotheby's Wine Encyclopedia"'' pg 66 Dorling Kindersley 2005 The wines most commonly offered ''en primeur'' are from

Bordeaux Bordeaux ( , ; Gascon oc, Bordèu ; eu, Bordele; it, Bordò; es, Burdeos) is a port city on the river Garonne in the Gironde department, Southwestern France. It is the capital of the Nouvelle-Aquitaine region, as well as the prefectur ...

Burgundy Burgundy (; french: link=no, Bourgogne ) is a historical territory and former administrative region and province of east-central France. The province was once home to the Dukes of Burgundy from the early 11th until the late 15th century. The c ...

, the Rhône Valley and

Port A port is a maritime facility comprising one or more wharves or loading areas, where ships load and discharge cargo and passengers. Although usually situated on a sea coast or estuary, ports can also be found far inland, such as Ham ...

, although other regions are adopting the practice.

Process

In the spring after a year long

harvest Harvesting is the process of gathering a ripe crop from the fields. Reaping is the cutting of grain or pulse for harvest, typically using a scythe, sickle, or reaper. On smaller farms with minimal mechanization, harvesting is the most labor-i ...

, merchants and trade organizations will taste barrel samples of wine that are often only 6–8 months old. In the case of Bordeaux, where the final wine is often a blend of several

grape varieties This list of grape varieties includes cultivated grapes, whether used for wine, or eating as a table grape, fresh or dried (raisin, currant, sultana). For a complete list of all grape species including those unimportant to agriculture, see Viti ...

, the winemaker will try to craft an approximate blend to sample. The composition of the final wine may differ from the sample depending on how each

barrel A barrel or cask is a hollow cylindrical container with a bulging center, longer than it is wide. They are traditionally made of wooden staves and bound by wooden or metal hoops. The word vat is often used for large containers for liquids, ...

matures during the aging process. Based on the initial sample, the wines will be giving a preliminary "score" or

wine rating A wine rating is a score assigned by one or more wine critics to a wine tasted as a summary of that critic's evaluation of that wine. A wine rating is therefore a subjective quality score, typically of a numerical nature, given to a specific bottl ...

based on the expected quality of the wine once it is bottled, released and has had time to mature. An ''en primeur'' wine gives the owner the right to receive the respective bottles of wines once the producer has completed the maturing phase of the wine. Wine bought ''en primeur'' is often directly placed into custom-free storage holding, 'in bond'. Known as a delicate method of investment, a purchase may ultimately be deemed a loss, or there may be considerable profit. For example, the 1982 vintage of

Château Latour Château Latour is a French wine estate, rated as a First Growth under the 1855 Bordeaux Classification, owned by Groupe Artemis. Latour lies at the very southeastern tip of the commune of Pauillac in the Médoc region to the north-west of Borde ...

, was sold at £250 a case ''en primeur'' in 1983, while valued in 2007 at £9,000, although the major part of this price increase occurred after bottling.

Potential benefits

En primeur can mean the producer is able to benefit from an improved cash flow system and a guaranteed exclusive, potentially high level sale of their product. This concept has existed in

for centuries and was only occasionally used in other areas such as

Piedmont it, Piemontese , population_note = , population_blank1_title = , population_blank1 = , demographics_type1 = , demographics1_footnotes = , demographics1_title1 = , demographics1_info1 = , demographics1_title2 ...

Tuscany Tuscany ( ; it, Toscana ) is a Regions of Italy, region in central Italy with an area of about and a population of about 3.8 million inhabitants. The regional capital is Florence (''Firenze''). Tuscany is known for its landscapes, history, art ...

Ribera del Duero Ribera del Duero is a Spanish Denominación de Origen Protegida (DOP) located in the country's northern plateau and is one of eleven 'quality wine' regions within the autonomous community of Castile and León. It is also one of several recogni ...

, and Rioja. In

Italy Italy ( it, Italia ), officially the Italian Republic, ) or the Republic of Italy, is a country in Southern Europe. It is located in the middle of the Mediterranean Sea, and its territory largely coincides with the homonymous geographical re ...

some work is being done to promote the development of an Italian ''en primeur'' market. For the consumer, purchasing ''en primeur'' gives them the opportunity to secure wines that may have very limited quantities and be difficult to buy after they are released. As with all investments the consumer is advised to use caution. The incidents of fraud in the "en primeur" market have been significant both in the US and in the UK and in the wine investment sector in general, where many have queried the (lack of) requirements to set up an investment firm. In favorable

s some classified Bordeaux estates can have nearly all of the year's inventory allocated or purchased before the wine is released. The purchase price during the ''en primeur'' period may also be lower than the price the wine will be once it is released. In April 2009, the 2008 en primeur from Bordeaux was released, priced at 30% less (on average) when compared to the previous year. This has created a huge buying frenzy within the market and investment opportunity has grown. Subsequently, the record release prices of the 2009 and 2010 vintages tested the resolve of the En Primeur market. Failure to re-adjust prices in the following two years effectively killed demand and many who bought into the 2009s and 10s were facing losses during the following four years. However the market has now turned and buying en primeur has become attractive once more. Indeed, those who bought into top wines of the 2014 vintage are now reporting average ROI of +13.4% with the wines soon to be released in bottle.

References

External links

How to buy en primeur
''Decanter'' article
The Problem with ''Primeur''
thewinedoctor.com
Perils of speculating en primeur
emissarywine.com {{italic title Commodity markets Wine