Winemega.com presents thereafter the best purchasing strategies as well as a few basic rules that need to be followed before ordering Bordeaux wine “En Primeur” 

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Is direct tasting from the barrel trustworthy?

Is it still reasonable to purchase great Bordeaux wines in regard to their present 
prices?

Is the “En Primeur” business risky? Does this kind of purchase remain a profitable transaction?
Which buying strategy should be selected?

The purchase of Bordeaux wines’ futures or “primeur” has taken place in Bordeaux for a very long time. It consists in ordering and paying for in advance to the producer a wine from the preceding year that will be delivered two years later.

The producers in the Gironde region traditionally sell the main part of their harvest to important local merchants in Bordeaux. These wholesalers later resell their wine to their clients (the tradesman to whom you order your bottles). As the growth of a Bordeaux wine generally takes between 12 to 18 months the wholesalers will only receive their orders two years after payment to the producers. The “primeur” wine often constitutes an interesting opportunity to buy some first hand wines at market price. However in some cases futures aren’t always considered as such excellent opportunities for the consumer.

Is direct tasting from the barrel trustworthy even though the wines are usually not finished?

Tasting such young wines at this early stage of evolution is always a difficult task and only experienced wine specialists can make out the coming profile of these wines. By tasting a substantial number of wine samples during a short period of time, it becomes easier for wine professionals to compare them and draw with more accuracy their future characteristics. 

In his book Guy Renvoisé warns us about the dangers of tasting very young wines: “…Generally the samples presented by the wine producers are taken from barrels before the final blending. By then several stages such as the wine’s fining, racking or final filtration have not yet been implemented. Consequently the wine will not necessarily provide the same image after the bottling process.” (Guy Renvoisé - Le monde du vin, art ou bluff - Editions du Rouergue, 1996).

Is it still reasonable to purchase great Bordeaux wines with regard to their present prices?

An economic decline as the one experienced in Europe and Asia in the late nineties or the early years of the new millenium can equally add some pressure on speculators to sell great quantities of “speculative” wine in order to build up cash at a time when demands weaken. A crash on the prices shortly follows and even the greatest names cannot be spared. Some high net worth people buy Bordeaux wines in a diversification approach to their investments and ultimately extremely few of them will likely drink what they have purchased. Most of those “investors” wait a few years before selling them selectively with big profits. This is a regrettable distortion done to the prejudice of the lovers of fines nectars as some beautiful and rare wines just never appear on the market or at an incredibly high prices. You must therefore be extremely selective in your choices. 

After the en primeur offering, chances are scarce to register any significant fall in the prices of Bordeaux’ 20-30 best wines (see Winemega.com’s TOP 50 classifications). On the other hand the chances of a sizeable price shedding are real for wines produced in important volumes and / or with average ratings below the 86/100 mark. Recent years have shown us that it can suffice that the quality of the following vintages proves to be equivalent or a bit better to trigger a notable lack of interest for the above mentioned vintage - example: 1997.

Is the “primeur” business risky?

It must remain clear that you pay in advance for a wine you will only receive only two years later. You must therefore make sure about the financial good health of the wine dealer whom you are in contact with. In case of the dealer’s bankruptcy it might become very difficult to recuperate all or part of your wines or money. Our advice is to deal with healthy and long established merchants of good reputation rather than to give your money to some “miracle offerings” which usually blossom during the “en primeur” period.

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Does this kind of purchase remain a profitable transaction?

Yes and no. It depends of your approach of the problem and also of other factors such as the current economic situation, the vintage’s quality as well as the intrinsic value of the wine at the time.

Do subscribe to “En Primeur” wines:

a) If you wish to purchase rare or very sought after wines and of course if you are not sure to find them easily later.

b) If you desire to acquire unusual bottle formats. It is sometime easier to obtain some wines in larger formats that are less in demand. By the way it is important to note that wines age better in large format containers than in smaller ones. Therefore apart from the Sauternes botrytized sweet wines or unless you wish to follow up your reds in their young years, try to avoid the 0.375l format.

c) If you feel that the proposed prices are competitive to those of previous vintages, which potentially give you big pleasure.

d) If you wish to ascertain with accuracy the origin of a wine. Cases of fraud or counterfeited bottles are more likely linked to older vintages. But with prices reaching in some cases several hundreds of Euros / Dollars per bottle, the wine is becoming vulnerable to forgery similarly to other luxury goods (bags, watches, etc.). Moreover the reproduction of a wine label and of a capsule is relatively easier and much more profit earning then to initiate a banknote or a Rolex watch!

It is also worth remembering that the distributors are inclined to somehow reward good and faithful clients who order wines even if the vintage is not the greatest. The chances to get the wine of your dreams in an exceptional vintage will obviously be greater if you are a regular client.

Do not subscribe to “En Primeur” wines:
a) If the wine to which you are planning to subscribe is still abundantly available in 
the shops two years later. It frequently happens that due to market conditions the wines are sold cheaper than at the time of subscription. With the improvements of the information and the development of Internet we engage you to arouse the competition between local merchants. For most of the faithful online retailers, the delivery of wine abroad is not a problem. But don't forget to add possible local taxes (possibly refunded) and other shipping expenses in your budget. 

b) If you realize that the cost price of a wine after delivery two years later will be equal or lower to the amount of money you have to settle increased of the risk free interest rate (savings rate, three months deposits and so forth) that would bring in your money during the same period. In order to summarize: if the risk free interest rate is for instance 5% the retail price of the wine two years later should at least be 10.25% higher than your subscription price. 

c) If you think that the proposed prices are not realistic next to similar wines of comparable vintages.

d) If the vintage can be considered as poor or even mediocre or for kind of wines unlikely to age well.

Which buying strategy to adopt?

The difficulty for most of the amateurs is to objectively reach an evaluation of the correct qualitative value of the vintage in question. Several advices are better than one. It is in fact what we at Winemega.com warmly recommend. We therefore advise you to use the following strategy.

We have classified the “primeur” offers in three distinct categories:

1) The Stars of Bordeaux (10 – 15 estates). A non exhaustive list would eventually include the Medoc’s five First Growth wines plus the top Saint Emilion and Pomerol chateaux (Ausone, Cheval-Blanc, Petrus, Lafleur, Le Pin) plus a few others depending of the vintage. 

The wonderful and very rare Sauternes sweet wine Chateau d’Yquem should also be considered in this short list. Today these wines are really considered as luxury goods.

2) The Super seconds (some 15 – 30 estates). These wines often reach average ratings over 88/100. They however do not range in the “Star system Club”.

3) The squad of the other estates whose quotation is usually below 85-87/100.

1) For the Star wines:

 the proposed prices often seem totally exaggerated. However a good way to get an idea about their value is to compare their proposed prices to those actually set for comparable vintages. For instance if one draws a parallel between the 2000 and the 1990 – which globally are of similar quality – the price of a Latour 2000 should in any case not exceed the current market price of a Latour 1990. It would otherwise be more advisable to purchase some 1990 Latour! For the Star wines, it is not very credible to think about a significant lowering of their prices in the near future. Whatever the economic situation, demand will always exceed supply for such wines. In consequence there is no hope of acquiring these nectars cheaper in a period covering the next 3 – 5 years. Conclusion: DO SUBSCRIBE – BUT COMPARE THE PRICES CAREFULLY.  Differences in prices of 10-15% are rather common between merchants. 

Conclusion: DO SUBSCRIBE. Your priority should go to chateaux labelled as excellent by a majority of wine tasters and chiefly in wines presenting little standard deviation (<5) in Winemega’s classifications.

 2) For the Super seconds: 

subscription to them is justified but one has to be aware of the fact that the evaluation prices in this category can be more volatile. Should for instance Mr R. Parker Jr. significantly lower some of his previous ratings, wines such as Lynch-Bages, Palmer, Pichon Baron, Pichon Lalande, Léoville-Barton, Pavie, Figeac or Trotanoy among others would see their prices immediately drop by 20% or more!

3) As already mentioned:

 (see our analysis about the 2000 vintage) it is within the squad of the other estates that the greatest variations of prices proportionally occur. Part of these chateaux often benefit of laudatory recommendations from influent tasters and do not hesitate to massively increase their prices even if the intrinsic quality or the regularity of their wines on a long period does not justify it. One can lay a bet on the fact that there will be no scarcity for these kinds of wines at the merchants’ level in 2 to 3 years. On the contrary most of these Chateaux will still remain easy to find and even in some cases at lower prices! We wish to quote the July 2001 number of the “Decanter Magazine” publication; “… It is clear that the wines tasted in March will be quite different after bottling some 15 months later". Because of the enormous pressure of the specialized American press one can well comprehend that the producers do everything in order to make sure of the best possible accessibility to their wines even in their extreme youth. A wine specialist from the Bordeaux region even declared to a producer: “The main thing is that your wine appears to be of an extraordinary good quality during one month!”. This could explain why some wine tasters seem to often make a revision of their notes to a lower level after bottling. Conclusion: DO NOT SUBSCRIBE except for some very specific cases.  

About the new craze the “garage-or garagiste” wines, the lack of time and perspective does not allow us to ascertain whether it is worth to acquire them through the “en primeur” channel mainly concerning their real aptitude to age. If you are totally overcome by one or the other of these micro productions and absolutely wish to purchase every year a few bottles of them, we recommend you to order them well in advance. As their production is extremely limited you run the risk to no longer find them later

Have a good shopping!

Alain Bringolf, for Winemega.com

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