A Guide to En Primeur
Author: Guest Blogger
En primeur is the French wine trade term for wines that are sold before they are bottled. Buying wines in this way is a fairly recent phenomenon, and whilst Bordeaux is perhaps most commonly known for selling its wines this way, it is not exclusive to this region. For example, we also offer Burgundy, Rhône and Italian wines en primeur. Wines sold en primeur are amongst the most sought after in the world, so buying them before they’re bottled offers a chance to secure them at what is often the lowest price available – a key factor when buying wines for investment.
Cask samples of the wines are tasted in the spring following the vintage, and the wines are judged and priced before being released for sale. Wine estates sometimes sell their wine in tranches; this means that they offer a certain proportion (a tranche) of their total production at any one time. It enables them to only sell as much as they need to for cash flow purposes and also to read the market – they quite often adjust the price of subsequent tranches.
Buying wine en primeur only became popular with private individuals towards the end of the last century. And only over the past 10-20 years have we seen wine being bought purely as an alternative investment, rather than for future consumption.
Buying en primeur can have disadvantages, especially in times of economic recession. Whilst prices of wines certainly can sky-rocket, we have also witnessed price falls. And sadly there have been tales of consumers buying en primeur wines from disreputable merchants and never receiving their wine. For this reason it is very important that you only buy from a trusted source, who you can be sure will deliver the wines to you and will also offer you good advice about when and what to buy.
You can only buy en primeur wines by the unmixed case (usually 12 bottles, or equivalent). The price of the wine is payable immediately but it does excludes duty and VAT; at Berrys the en primeur price also includes all shipping and insurance costs (not all merchants operate this way). Once the wine arrives in the UK, usually two years after their release (the 2011 vintage will arrive spring/summer 2014), it is put into storage, unless you elect to take delivery. Duty and VAT can be deferred by storing the wine in a registered bonded warehouse, such as our state of the art facility in Basingstoke. If it is possible that you may re-sell your wine later, it is advisable to store it in bond. To take delivery of your wine it must be cleared from bond, and this is when duty and VAT become payable. These taxes are calculated at the prevailing rate at the time, based on the price you originally paid for the wine (this can be advantageous if you have cellared your wines for many years).
Bordeaux wines can be released any time between the end of April and June. The release dates depend on the perceived quality of the vintage and the demand for the wines; if the vintage looks to be an exceptional one, producers often hold back and release their wines late to see how other properties are pricing their wines. Once the wines start getting released it’s a bit of a buying frenzy and these sought after wines get snapped up really quickly!
I hope this guide has helped, if you have any questions about en primeur please don’t hesitate to ask via the comments section below.