Bordeaux En Primeurs 2020 – will you be investing?

The Bordeaux 2020 vintage en primeur tastings are just a month away – it’s time to be considering whether you will be adding the region’s new arrivals to your collection. The 2019 vintage was released to the market at discounts around 30% for some of the top wines, creating the most exciting en primeur campaign for investors in the last decade. Will 2020 offer similar opportunities?

Early commentary has indicated that yields are lower for many estates due to the drought conditions last year. Bordeaux’s total 2020 vintage production was around 10% less than in 2019 and 2018, which were both close to the ten-year average.

Top Bordeaux 2020 Appellation Yields compared to 2019 and 2018:

Appellation 2018 Yield (Hl/100Ha)* 2019 Yield (Hl/100Ha) 2020 Yield (Hl/100Ha)
Margaux 37.4 49.2 36.3
St Julien 42.6 45.5 34.3
Pauillac 38.5 46.7 37.4
St Estephe 44.6 49.7 41.2
Pessac-Leognan 36.9 47.2 34.6
St Emilion 39.7 43 36.7
Pomerol 36.2 43 39.8
Sauternes & Barsac 15.7 13.6 12.3

Source: Liv-ex.com, Gavin Quinney. *Hl/100Ha – Hectolitres / 100 litres per hectare

Yields for some estates are down 25% in 2020 and quality is expected to be high, although variable. The challenge therefore for investors is to get hold of those highly scored wines with lower supply at the right price! Buying en primeur offers the opportunity to secure a wine position on the earliest release to market, arguably this should offer excellent potential for long term growth, but is reliant on pricing level and this is where the 2019 releases re-engaged the market in the en primeurs process.

Top wines last year were offered at price levels not seen since the fall-out from the 2008 financial market crash. It seemed that Bordeaux considered the impact the pandemic was wreaking on financial markets and strategically positioned the vintage for value. Whilst the global vaccine roll-out is still in its early stages, there is still a high degree of economic uncertainty and the market will look to see if Bordeaux will again offer value with the 2020 vintage. Investors should remind themselves of the pros and cons of investing in en primeur wines.

The benefits and risks of buying en primeurs:

BENEFITS RISKS
Provenance – blue-chip provenance with wines stored in barrel at the chateaux until bottled and shipped. Forecast risk – future quality scores and prices may not achieve en primeur promise
Release price – Purchase at first market entry price which should be life-time lowest (see risk) Release price – The first issue price may end up higher than later price performance, with potential loss or limited returns
Positioned for growth –Acquire for a long term hold and positioned for best possible returns Supply chain risk – the owner becomes exposed to delivery risk but this can be insured against
Access – opportunity to secure supply of rare wines  
Rescores – Acquiring EP wine tipped for improvement at in-bottle scores can deliver significant growth in value  

At this time of year, the trade is normally preparing for its annual visit to Bordeaux for the en primeur tastings. Covid-19 ripped the traditions away from this important event in the fine wine calendar last year and, sadly it will also be influencing the 2020 vintage tastings. The Union des Grands Crus de Bordeaux (UGCB) had originally scheduled the 2020 en primeurs tastngs in ten key cities for international markets (including Bordeaux):

  • 26 April – Zurich and Shanghai
  • 26 – 27 April – Brussels
  • 27 April – Frankfurt and Hong Kong
  • 27 – 28 April – Paris, London, San Francisco and New York

Unfortunately, the UK and USA events have now been cancelled due to the continued Covid restrictions and there may be further changes in the other European planned tastings if additional lockdown measures are imposed due to rising cases. The Chateaux will repeat the 2019 vintage tasting arrangements with samples shipped to key merchants and the international critics. We will be communicating investor information as soon as it becomes available and confirm our own allocations once these are secured late Spring.

For more information on investing in en primeur wines and to register your interest in the 2020 Bordeaux En Primeurs please click here and speak to a member of our team on 0203 384 2262.

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