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En Primeur - a safe way to buy wine?

The Problem with Primeur:

Part 1: En Primeur
An introduction
Part 2: The Consumer
Is en primeur a good deal?
Part 3: Buying Great Wines
Is en primeur the only way?
Part 4: Losing Out
En primeur - a safe way to buy?
Part 5: Advantages?
So should we buy en primeur?

The process of purchasing en primeur involves purchasing wine as a future, similar to the way in which cotton, coffee and other consumables are traded on international commodity futures markets. On the markets a futures contract is an agreement to buy or sell a commodity for a certain price at a certain time in the future. Traders purchase at a price which they expect to be less than the value of the product when it eventually hits the market. If this is the case, they've secured the product at a bargain price, and they may sell it on at a profit. Commodities may be traded many times before they actually reach the end-user.

These traders are essentially gamblers, as they are making a bet on the likelihood of the product coming to the market at a higher price than that which they paid. Like all gambles, however, there are risks, and not just the risk that the bottom may fall out of the market and they make a tremendous loss. If the deal falls through, for whatever reason, the trader will be left out of pocket and with nothing to show for it. All part of the game for the busy trader, but how would you feel if the thousands of hard-earned pounds, dollars or yen you spent on wine in an en primeur purchase bought you nothing, thanks to the merchant going bust, or even worse, dodgy dealing?

Dodgy Dealing

Unfortunately this is a well described event, and as a consequence plenty has been written about losing money when making an en primeur purchase. In a number of occurrences such an event was the result of an otherwise honest merchant going under as a result of their over-stretched finances. In other cases, unfortunately, it has been the result of con-men taking money with no intention of providing any wine as a result. The natural time lag between making the payment and the wine being delivered, typically 12-18 months, and the large quantities of cash frequently involved, make this a perfect vehicle for the con-man's skills. Jim Budd's award-winning website investdrinks.org is an excellent read for those wishing to educate themselves about such goings-on. This valuable resource is packed with information about those companies which have dubious motives. Unsurprisingly, yet disappointingly, many of these companies seem to involve the same few names.

Use reputable companies

For these reasons it is essential that en primeur purchases are made through a reputable merchant. Well established businesses in the UK include Bibendum, Seckford's and The Wine Society - but there are many more. In essence, it is up to you, the buyer, to satisfy yourself as to the financial position of any company with whom you enter into an en primeur deal.

Sometimes, however, even with reputable companies, en primeur deals don't always go to plan. In the past couple of years, one reputable company (which I will not name) with whom I had entered an en primeur deal for some wines from the 1999 Rhône vintage contacted me to inform me that one of the wines was no longer available. The merchant explained that the vigneron had withdrawn it from sale, and that the wine had received some 'treatment' - an explanation that I found rather dubious as the 1999 vintage was excellent in the Northern Rhône Valley. I was offered a substitute - the same wine from the subsequent vintage - which I accepted. My curiosity, however, was aroused, and I began to make some enquiries.

It quickly became apparent that the wine had been released onto the market elsewhere - although obviously not through my chosen merchant. The retail price was considerably higher than the price which myself and the merchant in question had agreed on. Some more nosing around revealed the final piece of the jigsaw - the wine had received a very high score from Robert Parker. It all adds up to a greedy vigneron withdrawing from a contract and selling on elsewhere at a higher price once he has realised the wine has an outstanding Parker score. In this situation the merchant was probably innocent in the matter, but the end result was the same - one disappointed customer.

When demand is high...

Despite the occasional horror story, buying en primeur can be a reliable way to secure wines. Unfortunately, in a great vintage the clamour to buy often results in en primeur offers being heavily over-subscribed. At least one merchant I know tells me their offer for Bordeaux 2000 was over-subscribed to the tune of, in the case of the most popular wines, nearly 600%. Consequently, unless you are a regular or long-term customer, when you attempt to purchase en primeur you are actually joining the back of a very long queue for a limited allocation of wines. So even taking into account the trading history of the merchant, and their current professional reputation, when demand is high you still may not get your wines. At least in this situation, however, the customer can move on and try and make a purchase elsewhere. But it still adds to the inconvenience of purchasing en primeur.

Perhaps en primeur isn't such a safe way to buy wine at all? Maybe, but when it works well it can provide a means for the consumer to obtain fine wines at a less extortionate price. So if you are determined to continue purchasing wines as the commodity trader purchases coffee, stick to a few ground rules. Always deal with well-established merchants with whom you are familiar. Even better, stick with just one or two famous names. After all, there's little to gain from shopping around as most wines are offered at very similar prices, and getting into bed with a merchant in this fashion means you will be higher up the pecking order when demand is high. Finally, always use your credit card to make the purchase - this will afford you some protection under Section 75 of the Consumer Credit Act 1974, which states that the credit company has 'equal liability' for condition and delivery of individual purchases greater than a value of £100. This could be the only way you will ever see your money again should disaster strike. (13/2/03)