En Primeur wine investment

Buying wines En Primeur simply means to buy the wine before it is even bottled.

After the crops have been harvested, the wines go through an initial fermentation. The best vats are then transferred to oak barrels for further fermentation and maturation in the chateaués wine rooms. About 14 to 20 months later, the new wine is tasted for the first time by the growers, wine critics, connoisseurs and buyers who are given first dibs to purchase them. In approximately one to two years, the wines are ready and these buyers can choose to pay the duty and taxes or have the wines stored in a bonded warehouse until it is sold and delivered to the next buyer. En Primeur can only be bought by the unmixed case, that is, in 12 bottles, 24 half bottles or 6 magnums.

Any region could potentially sell its wine by this method, but, in general, it is just restricted to a few wines,

In theory, wine from any region could potentially be sold this way but in reality, only a few wineries around the world are sought after En Primeur, mainly the "Premier Cru Classés, Burgundy, Rhone Valley, Port and the Bordeaux from France.

For Australian and Californian wines, also known as "New World Wines", its En Primeur is referred to as Wine Futures. In this case, wine producers can only succeed when their wines consistently compete for top ratings and grow considerably in value over the years.

Benefits of Buying En Primeur

When you purchase wine En Primeur, you will be rewarded in a number of ways:

• securing wines which are difficult to obtain, i.e. being able to obtain wines from a great vintage, such as Bordeaux 2005, which may produce as little as 200 cases a year
• securing wines in less common formats - magnums, Imperials etc.
• securing the wines at a lower price than before it is matured

Since buying wines En Primeur is mostly undertaken for financial gain to the buyers and a considerable amount of cash upfront is required, it is only natural that buyers get to purchase these wines at a lower price than they otherwise would pay once the wines are out in the consumer market. For some, this can be a dual form of investment - collecting their favourite wines at the lowest possible price and the opportunity to sell some of them later at a profit.

How to buy En Primeur

• Every September, the wineries crops will be harvested and then fermented in vats. The best vats are then selected to be transferred to oak barrels which will be stored away between 14 to 20 months for further fermentation and maturation.
• In the following year around March, the wine producers will invite a few exclusive brokers, wine writers and specialist reporters to taste the latest vintage.
• About a month later, members of the specialist press will publish their vintage assessments and reveal the results of the harvest and tasting notes. With these reviews, the owners are now ready to propose an opening price for their wines and solicit for sales.
• From May to mid June, the wines are then offered to their preferred buyers, established wine merchants, wholesalers and even hedge funds companies and private banks. Priorities are often awarded to those who follow the En Primeur campaigns faithfully every year and who usually acquire these wines at the lowest market price at the quantities they require.
• By the end of June, 99% of the Châteaux offering En Primeur sales will have put their wines on the market.
• Wines from the 2005 harvest will then be ready for delivery to their buyers from end 2007 to early 2008.

One cannot just walk into a Châteaux and request to buy their wines at their release price. Each Châteaux have a few exclusive négociants who get most of the allocations and they in turn will offer it to their preferred buyers.

When you purchase En Primeur, you will receive the respective bottles of wines once they are bottled between 18-24 months. Sometimes, the wines are stored in the producers' cellar or temperature controlled warehouse until considered matured enough for release.

From the beginning of En Primeur sales to the maturing phase of the wine, prices usually rise due to worldwide demand and speculation. Buyers can take hold of such opportunities to make good profits from reselling their allocations.