Buying wine ‘en primeur’. What is it? And is it worth it?
With the news that a local wine merchant is to offer wines ‘en primeur’ for the first time in Gibraltar we take a look at this most British of habits and ask if it could change our drinking landscape forever.
Charles De Gaulle always knew Britain did not belong in Europe:
“England in effect is insular, she is maritime, she is linked through her interactions, her markets and her supply lines to the most diverse and often the most distant countries; she pursues essentially industrial and commercial activities, and only slight agricultural ones. She has, in all her doings, very marked and very original habits and traditions.” So said De Gaulle over fifty years ago when he uttered his famous ‘Non’ on television following Britain’s request to join the then Common Market.
If De Gaulle had stopped and thought his sentiments through, he would have realized that the same could be said of Bordeaux, France’s nuclear missile in the current wine wars.
Bordeaux, English for two hundred years following King Henry’s marriage to Eleanor of Aquitaine in 1152, established itself as the most important exporter of wine anywhere. Like England it evolved into an outward-looking region, secure financially and with its very own traditions of doing business and dealing with the world outside. Bordeaux like England went were trade was to be found for its wines. It was here that selling and buying en primeur wines originated. Today little has changed and Bordeaux produces more Appellation Controlle wine than any other region. En primeur buying and selling underpins its complex trade structure – though it’s the UK where, for decades, individuals have been using this strange way of buying wine, previously the exclusive territory of wine merchants and negociants. Many consider Bordeaux wines to be the very best with its Grand Cru Classe wines dominating the fine wine world. Outside the Grand Cru Classe wines competition is fierce amongst producers and there are many fine wines to be had for modest amounts of money. In Gibraltar few opportunities exist to buy these wines, but that may well be about to change.
The news that Saccone and Speed will be offering Bordeaux wines en primeur in Gibraltar should get local wine drinkers excited, very excited. So, what exactly is buying wine en primeur all about?
In a nutshell it is buying wines whilst the wines are still lying in Bordeaux cellars in barrel but after thousands of wine writers and trade representatives have descended on Bordeaux to taste the wines in highly organised tastings during the spring following the vintage. Depending on how the vintage and individual wines are rated, the producers will then start pricing and selling their wines en primeur whilst still in barrel. Individuals taking up the offer will then pay their wines up front which will be delivered to them two years later once the wines are more mature and bottled. There are two main reasons for the individual to buy in this way. The first is that the price of the wines could go up once they become available on the retail market. The second is that many wines are in short supply and soon disappear. Many wine geeks have traditionally bought two cases, waiting a few years until the price of the wine doubles and then sold one case, effectively getting a ‘free case of wine for their own consumption. The wines are usually held in bond and the individual can sell his case with a simple paper transfer. When he takes delivery of his ‘drinking’ wine he will need to pay duty and vat at 20% if he or she is in the UK. Here we are lucky and all we need to pay when taking delivery would be about 50p irrespective of the value of the wine! Massive advantage as Trump would say. For the first time we could buy classical French wines at a large discount to UK prices and many wine enthusiasts here could, also for the first time, start seriously thinking about collecting wine for the future having paid a fraction of the eventual retail cost. Having the wines in bond will effectively prevent many of us from prematurely raiding our cellars which year by year could be added to increasing quantity and letting the wines maturing nicely until such time we decide to take delivery and start opening bottles.
To illustrate the process of en primeur buying let’s take Clerk Milon 2009 – a wonderful red from Pauillac. En primeur prices would have been released in July 2010 following the annual tastings. Had you taken the offer up you would have paid about £34 per bottle. Approximately two years later you would have taken delivery after paying duty and VAT taking the total cost of the wine to approximately £43.00. In Gibraltar having no VAT and only 50p duty the cost of course would be roughly £34.50. Today, a bottle of duty paid 2009 Clerc Milon would set you back about £78.00 retail in London. Since the wine is not yet at its optimum drinking window and becoming rarer the price will keep going up. En primeur of course covers all price points from relatively inexpensive wines at say £10, to wines costing many hundreds of pounds. The trick here is to buy wines which offer exceptional value for money. They exist in abundance in Bordeaux so I am looking forward to finding out what Saccone and Speed will be offering.
Outside the rarefied world of the Grand Crus competition is fierce amongst producers and putting together a cellar over the next few years should be within the reach of all wine drinkers. You could get together with friends and share cases, giving you access to several producers and price points. Given patience and good storage Bordeaux wines can improve for many years. Some may be unapproachable when young but given time will give the drinker something few wines from other countries can match.
A word of warning. Like everything else the price of wine can go up as well as down. Don’t buy wine you can’t afford to drink in the hope of making a killing. Should you decide to invest in wine, take specialised advice. Don’t buy en primeur wines through wine merchants who don’t have impeccable credentials.