En primeur or "wine futures

Futures contract

In finance, a futures contract is a standardized contract between two parties to exchange a specified asset of standardized quantity and quality for a price agreed today with delivery occurring at a specified future date, the delivery date. The contracts are traded on a futures exchange...

", is a method of purchasing wine

Wine

Wine is an alcoholic beverage, made of fermented fruit juice, usually from grapes. The natural chemical balance of grapes lets them ferment without the addition of sugars, acids, enzymes, or other nutrients. Grape wine is produced by fermenting crushed grapes using various types of yeast. Yeast...

s early while a vintage

Vintage

Vintage, in wine-making, is the process of picking grapes and creating the finished product . A vintage wine is one made from grapes that were all, or primarily, grown and harvested in a single specified year. In certain wines, it can denote quality, as in Port wine, where Port houses make and...

 is still in a barrel, offering the customer the opportunity to invest in a particular wine before it is bottled. Payment is made at an early stage, a year or 18 months prior to the official release of a vintage. A possible advantage of buying wines en primeur is that the wines may be considerably cheaper during the en primeur period than they will be once bottled and released on the market. However, that is not guaranteed and some wines may lose value over time. Wine experts, like Tom Stevenson

Tom Stevenson

Tom Stevenson is a British author who has been writing about wine for more than 30 years. Described by his colleagues as one of today’s most prolific wine authors, Stevenson is regarded as the world’s leading authority on Champagne...

, recommend buying en primeur for wines with very limited quantities and will most likely not be available when they are released.
The wines most commonly offered en primeur are from Bordeaux

Bordeaux wine

A Bordeaux wine is any wine produced in the Bordeaux region of France. Average vintages produce over 700 million bottles of Bordeaux wine, ranging from large quantities of everyday table wine, to some of the most expensive and prestigious wines in the world...

, Burgundy

Burgundy wine

Burgundy wine is wine made in the Burgundy region in eastern France, in the valleys and slopes west of the Saône River, a tributary of the Rhône. The most famous wines produced here - those commonly referred to as "Burgundies" - are red wines made from Pinot Noir grapes or white wines made from...

, the Rhône Valley and Port

Port wine

Port wine is a Portuguese fortified wine produced exclusively in the Douro Valley in the northern provinces of Portugal. It is typically a sweet, red wine, often served as a dessert wine, and comes in dry, semi-dry, and white varieties...

, although other regions are adopting the practice.

Process

In following spring after a year's harvest

Harvest (wine)

The harvesting of wine grapes is one of the most crucial steps in the process of winemaking. The time of harvest is determined primarily by the ripeness of the grape as measured by sugar, acid and tannin levels with winemakers basing their decision to pick based on the style of wine they wish to...

, merchants and trade organization will taste barrel samples of wine that is often only 6–8 months old. In the case of Bordeaux, where the final wine is often a blend of several grape varieties, the winemaker will try to craft an approximate blend to sample. The composition of the final wine may differ from the sample depending on how each barrel matures during the aging process. Based on the initial sample, the wines will be giving a preliminary "score" or wine rating

Wine rating

A wine rating is a score assigned by one or more wine critics to a wine tasted as a summary of that critic's evaluation of that wine. A wine rating is therefore a subjective quality score, typically of a numerical nature, given to a specific bottle of wine...

 based on the expected quality of the wine once it is bottled, released and has had time to mature.

An en primeur wine gives the owner the right to receive the respective bottles of wines once the producer has completed the maturing phase of the wine. Wine bought en primeur is often directly placed into custom-free storage holding, 'in bond'

Wines in bond

Wines in bond, or simply in bond, are purchased wines held in a bonded warehouse, which have not passed through customs, with no Duty and VAT paid on them....

. Known as a delicate method of investment, a purchase may ultimately be deemed a loss, or there may be considerable profit. For example, the 1982 vintage of Château Latour

Château Latour

Château Latour is a French wine estate, rated as a First Growth under the 1855 Bordeaux Classification. Latour lies at the very southeastern tip of the commune of Pauillac in the Médoc region to the north-west of Bordeaux, at its border with Saint-Julien, and only a few hundred metres from the...

, was sold at £250 a case en primeur in 1983, while valued in 2007 at £9,000, although the major part of this price increase occurred after bottling.

Potential benefits

The producer is able to benefit from an improved cash flow system and a guaranteed exclusive and high level sale of the product. This concept has existed in Bordeaux

Bordeaux wine

A Bordeaux wine is any wine produced in the Bordeaux region of France. Average vintages produce over 700 million bottles of Bordeaux wine, ranging from large quantities of everyday table wine, to some of the most expensive and prestigious wines in the world...

 for centuries and was only occasionally used in other areas such as Burgundy

Burgundy wine

Burgundy wine is wine made in the Burgundy region in eastern France, in the valleys and slopes west of the Saône River, a tributary of the Rhône. The most famous wines produced here - those commonly referred to as "Burgundies" - are red wines made from Pinot Noir grapes or white wines made from...

, Piedmont

Piemonte (wine)

Piemonte wine is the range of Italian wines made in the province of Piedmont in the northwestern corner of Italy.The best-known wines from the region include Barolo and Barbaresco. They are made from the Nebbiolo grape...

, Tuscany

Tuscany

Tuscany is a region in Italy. It has an area of about 23,000 square kilometres and a population of about 3.75 million inhabitants. The regional capital is Florence ....

, Ribera del Duero

Ribera del Duero

Ribera del Duero is a Spanish Denominación de Origen located in the country's northern plateau and is one of eleven 'quality wine' regions within the autonomous community of Castile and León...

, and Rioja

Rioja (wine)

Rioja is a wine, with Denominación de Origen Calificada named after La Rioja, in Spain. Rioja is made from grapes grown not only in the Autonomous Community of La Rioja, but also in parts of Navarre and the Basque province of Álava. Rioja is further subdivided into three zones: Rioja Alta, Rioja...

. In Italy

Italian wine

Italian wine is wine produced in Italy, a country which is home to some of the oldest wine-producing regions in the world. Italy is the world's largest wine producer, responsible for approximately one-fifth of world wine production in 2005. Italian wine is exported largely around the world and has...

 some work is being done to promote the development of Italian en primeur market.

For the consumer, purchasing en primeur gives them the opportunity to secure wines that may have very limited quantities and be difficult to get after they are released. In favorable vintage

Vintage

Vintage, in wine-making, is the process of picking grapes and creating the finished product . A vintage wine is one made from grapes that were all, or primarily, grown and harvested in a single specified year. In certain wines, it can denote quality, as in Port wine, where Port houses make and...

s some classified Bordeaux estates

Bordeaux Wine Official Classification of 1855

The Bordeaux Wine Official Classification of 1855 resulted from the 1855 Exposition Universelle de Paris, when Emperor Napoleon III requested a classification system for France's best Bordeaux wines which were to be on display for visitors from around the world...

can have nearly all that year's inventory be allocated or purchased before the wine is released. The purchase price during the en primeur period may also be lower than the price the wine will be once it is released.

In April 2009 the release of the 2008 en primeur from Bordeaux was released 30% down on average compared to the previous year. This has created a huge buying frenzy within the market and investment opportunity has grown.

External links

• How to buy en primeur Decanter article
• The Problem with Primeur thewinedoctor.com
• Perils of speculating en primeur emissarywine.com