En Primeur: The Earliest Form of Investment - So How Does It Work?

What is En Primeur?

En primeur (EP) is a term in the French wine trade, literally meaning “in their prime,” referring to the early stage of fine wine when it is still maturing in barrels and has not yet been bottled. It operates as a futures market for wines that require aging in the cellar.

During en primeur, both merchants and vineyards utilize this system to facilitate the purchase of wines before they are bottled and released to the market. Among the most sought-after en primeur wines are those from the prestigious’ French wine region of Bordeaux.

The origins of the en primeur system can be traced back to the aftermath of the 1855 classification, when Bordeaux negociants (merchants) would visit local or regional chateaux (wine estates) before the harvest to acquire Cabernet or Merlot grapes directly from the vine.

However, the modern-day en primeur system was formalized in the 1970s with the establishment of Bordeaux En Primeur tasting week. Its development accelerated after World War II, when chateaux found it necessary to sell wine earlier in its maturation process to generate income.

Why invest in En Primeur wines?

The initial En Primeur price typically offers significant savings compared to the eventual market price of the wine. Due to the necessary maturation process in barrels and/or bottles, these wines are typically shipped 2-3 years after the vintage. This extended period allows for proper fermentation and maturation, ensuring the wine reaches its full potential before release.

What are the benefits of buying EP Wines?

En Primeur wines often yield higher profit margins due to their significantly lower prices compared to the bottled vintage released later. They also provide a unique opportunity to acquire limited-edition Bordeaux or Burgundy wines that become scarce once they hit the market.

Among the additional benefits of EP wine:

• Guaranteed provenance: EP buyers become the inaugural owners of each vintage’s wines, eliminating any doubts regarding the wine’s lineage.
• Price advantage: Investing in wine ‘futures’ offers a cost advantage over purchasing bottled wines later. In today’s climate of rising inflation, where fine wine prices continue to appreciate steadily, there are numerous value opportunities to explore.
• Investment potential: EP wines can hold strong investment potential, provided buyers select the right wines and understand the pricing strategies of chateaux in the competitive market landscape.

Accessing EP wines can be challenging, particularly for novice investors, as selection within any given vintage can be a extensive process. Supply, critic score, price and brand recognition are just some of the factors to be considered before taking the plunge. Consequently, EP offering remains invitation only at Moncharm due to the speculative nature of this style of investment. 

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