2014 En Primeur purchases show value of buying futures

Peter ShakeshaftThe Vin-X team attended Bordeaux’s Union de Grand Cru trade tasting of the 2014 vintage in London last week, the opinion of which has evolved to now being determined as “a good vintage not yet showing at its best.”

There has been ongoing industry debate over the last four en primeur campaigns (2012 – 2015 vintages) about Bordeaux’s pricing strategies and the denegration of the original philosophy of en primeur purchases , i.e. to provide the buyer with an anticipated discount to eventual physical prices once the wines go into bottle and are shipped.

The fact is, however, post the outstanding 2009 and 2010 vintages, the release prices remained markedly high for the lesser quality vintages of 2011 – 14 and subsequently ‘physical’ prices have, in the main, underperformed en primeur release prices, leaving buyers out of pocket and increasing questions being asked about the future of the ‘en primeurs process’.

Wine CellarThe turn around in the fine wine market in 2016 has of course seen prices rise across the board and the 2014 vintage, now going physical with wines to be shipped in the New Year, is seeing prices currently which benefit the en primeur buyer.

The second wines of the First Growths and big Right Bank names have been the best performers at this stage for the crop of Bordeaux 2014. Château Mouton-Rothschild’s second wine; Petit Mouton has led the pack seeing an increase of 91.8% from its release price of £756 per case to its current trade price on Liv-ex of £1,450. Lafite’s second wine, Château Lafite Carruades is up 90.2% and Margaux’s Pavillon Rouge is also one of the best performers up 55.4%.

The current market growth has enhanced the continuing success of First Growth Second wines in the secondary market and these three in particular were the best performing wines on the Liv-ex Bordeaux 500 at the start of the year (January 2016).

The Right Bank has also seen strong performances in the 2014 vintage, in particular Le Pin, Petrus, Canon and Vieux-Chateau-Certan, thought by many to be the wine of the vintage, have all seen rises of more than 35% since release and Le Pin and Petrus are currently valued close to £20,000 per case.

In terms of First Growth performance Chateau Mouton Rothschild’s Grand Vin has risen 41% since release – for more detail see the table:

Bordeux 2014 Top Risers Since Release

source: Liv-ex

Of course, it can’t all be good news and there have also been wines that have not performed so well. But in principle, in a rising market en primeur purchasers have much to smile about as their profit margins are certainly enhanced by buying at first chateau release.

For more information on current en primeur opportunities call the Vin-X team now on 0203 384 2262.