En Primeur Wine Buying

En Primeur, or "Wine Futures", is a method of purchasing wines early while a vintage is still in a barrel, offering the customer the opportunity to invest in a particular wine before it is bottled. Much like commodity futures such as cotton, coffee and other consumables are traded on international commodity markets, en primeur is purchased a year to 18 months before the official bottling and release of a vintage.

As with other futures, the en primeur buyer is making a payment to secure the vintage at a certain price for collection in the future, once the maturing process of the wine has been completed and the wine bottled. As the purchase of these vintages is made before the wine can be sampled by the experts, its value has not yet been accurately determined in the market. Because of this situation, the actual value determined upon the vintage's release can be either more or less than the amount paid for the en primeur.

It is of course the expectation that the wine, especially those produced by the prestigious top 5 first growth chateaux, will increase in value upon its bottling and a good review from Robert Parker, producing a nice profit for the investor as soon as they take physical possession of their purchase. This is not, however, a guarantee and although the majority of investment grade vintages will increase in value, some might actually lose value in the short term. But it is important to note that no investment grade wine has ever seen its value stay below the en primeur cost in the long term.

Wine bought en primeur is placed directly into custom-free storage holding, 'in bond', and may be traded many times before they actually reach the end-user.
Known as a delicate method of investment, it is nevertheless undertaken by wine merchants and investors all over the world in the hopes of realizing substantial profits.

One good example is the 1990 vintage of Château Le Pin, this was sold at £780 a case en primeur in 1991, and the same wine was recently valued at £29,137. Though the major part of this price increase occurred after bottling, it still illustrates the value of investigating in the en primeur market.