The 2018 En Primeurs are hitting the market and the Bordeaux Chateaux are now at the business end of the campaign – it’s time to consider which wines you should add to your portfolio.
Bordeaux’s En Primeurs system is probably one of the most efficient market mechanisms in the world. The release of around US$1billion of wine (the First Growths alone are responsible for between US$400M to $600M) is incomparable anywhere else in the world and Bordeaux commands the industry newsfeeds for two months every Spring.
En Primeurs explained:
Chateaux negotiate to forward sell the majority of their previous year’s production to the Bordeaux negociants within hours, or minutes in certain cases, at a strategic point after the critics scores of the vintage are published every Spring.
The En Primeurs supply chain flows from the Chateaux, to the negociants, to the world’s merchants and then to buyers who maybe collectors, investors and consumers, and these maybe individuals or organisations. Over the last two decades an increasing proportion of potential future profit is being retained by the Chateaux through the rise in first release prices to the negociants. This has resulted in increased risk for the rest of the chain, with reduced margins and therefore a decreasing incentive to buy at En Primeurs stage. The 2006 and 2011 vintages are clear examples of cases where older aged wines can be bought today at, or below, the original En Primeurs release price. This resulted in a growing scepticism about the future of the system in recent years.
The latest market development was probably instigated by Latour, when the First Growth Chateau removed its supply completely from the En Primeurs system in 2012. No other estate has been that radical, but several are now issuing a lower volume at En Primeurs stage. In a market with finite supply of a product that improves over time, you can understand the rationale. With this in mind, we can see that those Chateaux that do price smartly at En Primeur to keep the market engaged, which also have a retained supply to maximise their returns over time as the wines enter their drinking windows, that they will be of ongoing interest to the market.
Bordeaux En Primeurs 2018
So what does all this mean for Bordeaux 2018? Ultimately, the market cannot help but be excited about the latest vintage, the critics scores were published towards the end of April – overall it is a good quality year. But which wines should fine wine investors be interested in?
Top scored wines of the vintage include Ausone, Angelus, Cheval Blanc, Lafite, Lafleur, Margaux, Mouton Rothschild, Pavie and Petrus. In a broad review of critics scores for the vintage, Latour is currently looking like the trade’s choice of ‘wine of the vintage’, as surveyed by Liv-ex, but this will not be available En Primeur of course!
The wines are being released daily now to the market. Angelus was quick to issue at a discount to 2017, but this has not been the standard trend. Of those Chateaux who have released to date the more modest increases on last year have included Pontet-Canet, 5% up on 2017 to negociants, but as a rule the growth in release prices are higher. 2018 is, on average, a better quality vintage of course and this is being reflected in price. Examples include Lynch Bages, which is up 20%, Leoville Poyferre 22% and Leoville Barton 17%. We are still waiting for the First Growths and other key estates and monitoring quality and pricing at each release.
Build a fine wine vertical through En Primeurs to guarantee supply
Vin-X clients who own Chateau Pavie wines were invited to visit the estate in May to taste the 2018 vintage, which was a truly special experience. For many of our owners who bought the 2017 vintage, they did so with the intention of creating a special vertical linked to one of the very best wine producers in the world. Pavie 2018 has achieved excellent critics’ scores including Wine Advocate 97 – 100 and Suckling 98 – 99. With this in mind we will be securing Chateau Pavie 2018 for our clients on release, expected early June – we will keep you posted.
FOR MORE INFORMATION ON 2018 EN PRIMEUR RELEASES: CONTACT THE VIN-X TEAM NOW ON 0203 384 2262.