Buying Bordeaux En-Primeur?
As the Bordeaux 2024 En-Primeur (EP) season is almost upon us I thought it may be of interest to some tempted into the opaque world of EP, to share some thoughts on the risks and theoretically, the possible rewards.
EP is a strange institution where private and institutional wine buyers are giving unsecured loans to merchants, who in turn hand over that cash (over a 12 month period) to the participating Château via Negotiants who provide allocations and also via Courtiers, who are the go-betweens from Château to Negotiant.
The perceived logic behind making these purchase include a few varied elements.
1) guaranteed provenance
2) an ability to specify the bottle sizes required
3) in theory, the least expensive opportunity to buy the wines
To those points, 1) is something which is increasingly important in trading wine - proof of origin. In the UK we can feel pretty safe that shipments departing Bordeaux are unlikely to be tampered with and therefore, once safely tucked away in a UK bonded warehouse (preferably, under your name not the vendors) the proof is secure.
The advantage of 2) is an important point if you want to guarantee access to 1/2s, Magnums or specific large format bottles. Bordeaux Châteaux request bottling instructions from the purchaser (via your Merchant) and the default is 75cl.
Point 3) is where I would strongly debate who the winners are? Merchants sell you EP wines and their margin is secure. When the wines become physical in the UK there is a potential fork in the road since if critic's "in bottle" reviews exceed a vintage's expectations, then there is a small chance that a mini price rise will take place. The likelihood is that most of this will go unnoticed and the Bordeaux Cru Classé is now in a probable 5-7 year no-man's land. Too young to drink and lacking in any marketing hype, the prices almost always drift south providing for me, the perfect buying opportunity at depressed prices.
Expert Advice: Some years ago I wrote a paper for a law firm on the security of title when buying wines EP. The paper went into considerable detail about the archaic mechanism and highlighted that anyone handing over cash to a merchant, needed to be entirely convinced that they would still be in business 2 years later.
My point here is the risk in security of title for a couple of years would make sense for buyers, if the cost saving was both positively tangible and guaranteed. The opposite has been true for many vintages and there are some great deals out there at prices below the original EP levels.
2024 EP and how it sells is going to be very interesting.
The wines probably need to be very well priced because otherwise, the Châteaux may have to build more storage...
This is a link to an article published by Decanter Magazine echoing the pricing conundrum.
The release timing comes with the backdrop of two major client bases being out on a limb - The USA because of Trump's threatened and actual import tariffs and China, whose economy is anything but robust at present.
The USA has attracted comments such as 'buying EP is less of an issue for the US because the stock is not yet physical and a lot can change before the wines are ready to ship'
I mentioned the '5-7 year no man's land' but 10 years is for many, the moment to check what a vintage is up to. We have a dinner in a beautiful Private Dining Room in a world renowned restaurant in London's Soho called L'Escargot
The dinner will be featuring 4 Cru Classé from the 2015 vintage and takes place on 22nd May, 2025 For Tickets Click Here
