Purchasing wine as “futures” or “en primeur” means purchasing it before it is bottled, usually when it is still in the barrel. Industry specialists have the opportunity to taste the wines while they are maturing. Then, using vintage reports as a guide, they make judgements about the wine’s worth.
Prices are then fixed, and futures are offered months or years (at least 18 months to two years for Bordeaux) before the wine reaches the consumer.
This technique is most well-known and commonly utilized in Bordeaux, although it is also employed in other wines such as Burgundy and Port.
What does the term “futures” in wine mean?
What exactly are futures? Acquiring Futures, also known as en primeur, is the process of purchasing wine that is still in the barrel and has not yet been bottled. In the spring following the harvest, the top Bordeaux chateaux offer the majority of their wines (about 8090%) as Futures.
Is it wise to invest in wine futures?
Futures, also known as En Primeur, allows anyone to purchase some of the most sought-after Bordeaux wines 1-2 years before they are bottled and offered on the market. Thousands of wine professionals flock to Bordeaux each spring for the launch of the Futures campaign. Over 150 of the world’s most prestigious estates invite journalists, buyers, importers, retailers, and other wine professionals to sample barrel samples from the most recent vintage. The landowner then releases the prices, allowing wine retailers to purchase their Futures. Only individuals who are registered with the Place de Bordeaux system, such as Millesima, can acquire these wines directly from the estates. Purchasing wine futures also allows you to get the most in-demand wines that may be nearly impossible to locate when they are launched in a number of formats, including half bottles, magnums, and larger bottles.
Is it possible to profit from wine futures?
Wine futures provide a means to invest in the early phases of the winemaking process, as most wines increase in value over time. A claim on a yearly vintage that has been harvested but not yet bottled is referred to as a wine future. The holder of a wine future can profit if the wine’s value climbs after it is released on the market. Taking actual control of the wine, on the other hand, comes with its own set of benefits.
So, what exactly are Bordeaux futures?
Bordeaux futures, also known as en primeur, refers to buying wine that is still in barrel and will be delivered after it has been bottled. Bordeaux chateaux have been selling their wines before they are released for almost 200 years.
What is a pre-sale of wine futures?
You’ve probably heard the terms “Bordeaux futures” and “Burgundy pre-arrivals,” but do you really know what they mean? Even well-informed wine collectors make the mistake of confusing futures and pre-arrivals. In truth, both expressions pertain to the purchase of wines “They reflect two different types of presales: “en primeur” and “en premier.” The purpose of wine futures and pre-arrivals is to gain quick access to the best wines without having to wait for them to sell out. En primeur wine is regarded by collectors as a safe investment; as noted financial counselor Suze Orman once observed, “What happened to the value of my wine futures astounded me. “Did I really earn more money on wine barrel futures than I did on the stock market?” I thought to myself. While many collectors have had success using futures, this strategy does come with hazards that every collector should be aware of. As a result, collectors must be aware of the differences between futures and pre-arrivals.
Muddled Definitions Confuse Collectors
Many wine collectors, wine bloggers, and wine journalists interchange the terms “pre-arrival” and “future,” but this is a misconception; these terms truly indicate two different things. Wine futures are essentially pre-sales that can take place up to two years before a bottle is launched on the market. When you buy wine futures, you’re usually buying wine that hasn’t even left the barrel yet; the wine hasn’t been bottled yet, so its quality isn’t guaranteed. Pre-arrivals, on the other hand, are sold to collectors just months before a wine is released on the open market, long after it has been bottled. Pre-arrival sales usually happen in the six months between when a wine is bottled and when it is sent to importers. Brokers negotiate presale rates to ensure that their clients obtain the bottles immediately when they are released, while the wine ages in bottles on the estate. Often, wine experts who receive early access to the vintage or the estates’ winemakers have already graded the bottles for quality.
However, because exact terminology varies by estate, importer, and collector, these two meanings aren’t usually employed in every sale. Some brokers may write contracts professing to sell wine futures to collectors when they are actually offering pre-arrivals of wine that is already in the bottle. Similarly, some brokers may write contracts claiming to be selling vintage pre-arrivals when the wine is still in the barrel. Collectors find it difficult to identify the best solution due to the lack of legislation surrounding these terms. This is why it is critical to thoroughly study every contract with a broker to ensure that the sale is properly labeled. Don’t take the broker’s word for it when he says he’s selling “pre-arrivals”; before you agree to buy from him, ask him if that means the wine is already in the bottle.
Futures Get Collectors Ahead, But at a Risk
When you adore Bordeaux wine, it’s difficult to turn down an offer of bottles from the region’s best estates, especially when you can get your hands on the best vintages years before they’re offered to the general public. The main draw of wine futures is that they give collectors a “head start” on the competition, allowing them to get bottles two years or more before they sell out on the open market. While it is true that some vintages are cheaper to acquire in futures than in after-market sales, this is not true for all vintages traded in futures. Because of an inflow of wine purchases from China in the last decade, more collectors have resorted to Bordeaux wine futures. Chinese collectors have been snapping up hundreds of cases of Bordeaux wine as soon as it is released, making bottles very expensive and difficult to come by. Buying futures means getting in on early sales at low prices before other investors snatched up every case.
Many Bordeaux estates, on the other hand, are actively fighting the wine futures growth. When some Bordeaux vintages fail to live up to the hype they receive from wine futures, collectors begin to question whether buying Bordeaux wine early is worth the investment, according to Max Lalondrelle, buying director at Berry Bros. & Rudd. “Regardless of the quality of the vintage, it is proving impossible to encourage our clients to purchase into the en primeur system when there is absolutely nothing in it for them or for us,” he says. To put it another way, even when vintage quality is excellent, top estates cannot always guarantee a profitable futures investment years before the bottle is released.
Two years before a wine is ready to be sold, no one can completely guarantee its quality. Robert Parker used to taste wines straight from the barrel to see how well they were aging, but he has since retired from this position. He claims that he will continue to sample wine from the bottle after it has been released. “If you go to the good restaurants in America now, Bordeaux is disappearing,” Parker says, “and a lot of that is their own fault for not making the 2011s, ’12s, and ’13s properly priced.” Many wines sold futures at considerably higher prices in previous vintages solely because Parker sampled them en primeur before bottling, resulting in an investing bubble in which the futures price far exceeded the genuine worth of the bottle on the market two years later.
Tampering and Fraud in Wine Futures
Brokers with the greatest of intentions can sell collectors worthless futures if something goes wrong with the wine before bottling. In 2012, for example, vandals stormed into the historic Case Basse di Soldera estate and dumped gallons of wine from the 2007 through 2012 vintages on the floor. In this occurrence, Soldera lost roughly 84,000 bottles, which was the majority of the wine housed in vats at the time. Because Soldera only had a small number of bottles to sell in the aftermath of the damage, anyone who held futures on these bottles was going to lose money. Instead of individual brokers selling wine futures, the majority of these bottles would go to established, full-scale importers.
Even if the wine is delivered to the bottle in perfect condition and retains its great quality, collectors must be concerned about wine futures scam. Rare LLC, a futures vendor, was accused of collecting money from collectors and never delivering the bottles after they were issued. Rare LLC is thought to have lost $20 million in unpaid funds to investors. Ronald Wallace, the company’s founder, is said to have made $13 million from wine collectors, spending the money on luxurious cars, residences, and trips around the world. He was eventually ordered by the court to repay his victims $11 million. Because they understood they wouldn’t get their bottles for at least another two years, many of the collectors who invested with Wallace had no idea he was selling phony futures. To be fair, this is an unusual occurrence, but it’s one that collectors should keep in mind before buying in wine futures.
Pre-Arrivals Offer Safety Nets
Pre-arrivals, unlike wine futures, are almost-guaranteed bottles of wine. When a wine is bottled, the chances of something going wrong are far smaller than when it is still in the barrel. This is because winemakers test the wine for spoilage before bottling, wine experts can grade the wine more properly later in its life, and importers know how many bottles they will receive from the estate. Buying wine before it is released is still a good investment, but collectors should focus on pre-arrivals rather than futures as much as possible. Lafite Rothschild, for example, was one of the greatest en primeur investments of 2014. This vintage had an initial price of $314 per bottle, which was a 25% reduction from the previous year’s en primeur price, making it a favorable initial investment.
The trick to investing in high-quality pre-arrivals is to buy the wine at its lowest price in the spring, just before it hits the market, and then cellar it for at least 10 years to earn a return on your investment. A collector may pay $97 for a bottle of 2014 Chateau Montrose before it goes on the market, then sell it for twice as much two years later, or up to three times the original price once it reaches peak drinking age. Similarly, bottles of Leoville Las Cases sell for around $104 en primeur, but might be valued up to $500 if the wine is drinking.
How to Safely Invest in Pre-Arrivals
To get the most out of a pre-arrival purchase, collectors must first secure the services of a reputable broker. As a general guideline, never buy wine from brokers that claim to sell bottles for significantly less than the typical market price, as they are most likely selling counterfeit or stolen items. It’s also a good idea to have a written estimate of when the bottles will arrive. Anyone who says the wine will come “sometime next year” or “next spring” should be avoided. Good brokers can provide you a precise estimate for when your wine will arrive at your door, ideally within a two-month timeframe. You should ask to be notified if something happens that is beyond the broker’s control.
Above all, never expect any portion of the procedure, including reimbursements, to be included in the arrangement between you and the broker. Request that your broker include a return clause in your contract in the event that the wine does not come as promised. Make sure the broker can show you confirmation that the bottles he says he’ll collect from the estate will actually arrive. Don’t buy from a broker who promises to get the wine but can’t tell you how many bottles he expects to receive. The majority of the time, these transactions fail, the broker never receives the wine, and the collector loses hundreds of dollars. When you think you’ve discovered someone trustworthy to work with, start with a single pre-arrival bottle sale to observe how they operate; if everything appears to be in order, begin investing in more bottles.
Is it worth investing in Bordeaux futures?
Many of these wines have excellent tannins and are pure and graceful. Their release pricing are also attractive, as they are on average 30% less expensive than wines from the same high-quality 2018 vintage. 2019 Bordeaux futures are wonderful buys for collectors since they offer outstanding quality at an unbelievable price.
What is the procedure for purchasing futures wine?
If you’ve decided to buy wine futures, you’ll need a straightforward method of doing so. There are a few venues where you may buy wine futures on the internet. This is the most convenient method for retail buyers to obtain wine futures.
Millesima
One of the greatest locations to buy wine futures online is at this global wine shop. Millesima offers a user-friendly interface for searching for wine futures by region. You may look for specific wine futures and discover their arrival date, as well as scores from Robert Parker and James Suckling and the winemaker’s whole inventory.
Wally’s Wine and Spirits
This is another another excellent alternative for buying wine futures on the internet. Wally’s is a well-known wine merchant on the West Coast. They have a lengthy history of selling wine futures and are a trustworthy supplier on the internet. Their wine futures are categorized and filtered by price, vintage, producer, and varietal.
What exactly is Vinovest?
Vinovest is a wine investment platform that makes excellent wine investments accessible to everyone. We give investors unrivaled access to world-class wines, as well as liquidity and transparency. Everyday investors may now own the best of Burgundy, Bordeaux, and beyond thanks to our wine and technology specialists.
So, what exactly is primeur wine?
- En Primeur wines are purchased before they are bottled and released onto the market, while they are still in the process of being bottled and marketed. En Primeur wines are purchased at In Bond prices, meaning they are free of duty and VAT.
- When the wines arrive in the UK, they will be held in our Customers’ Private Reserves under bond on your behalf.
- You’ll be contacted when they arrive, and you’ll be asked for any further delivery instructions.
- Ex-Vat and Ex-Duty applies to all En Primeur purchases. These taxes become due if/when you opt to have the wines shipped (to any location in the EU). En Primeur wines are not eligible for any other discounts or coupons.