Investing in wine: buying “En Primeurs”
The traditional "Semaine des Primeurs" (literally “Wine grocers Week”) in Bordeaux brings together Châteaux, merchants, importers, critics and specialized journalists from all over the world. They taste the wines of the new vintage and discover the lots presented, which are samples taken from barrels. Explore this major event of the wine universe with Matthieu Gombault, Head of our Wine Banking Services(1).
What is the “Primeurs” system?
The "Primeurs" system was invented in Bordeaux more than two centuries ago and has survived all economic crises. A "primeur wine" designates a wine marketed by the professionals of the Bordeaux marketplace, while it has just begun its maturation in barrels in the Château (this maturation lasts from 18 to 24 months). Historically, only the “Grands Crus classes”, or in other words, the top-tier classification of French wine, took part in the “Primeurs”.Nowadays, most of the quality estates are present, whether classified or not. At the end of this event, which is held in April of the year following the vintage, the reference prices for the new vintage are set. Note that the term "vin primeur" has a different meaning in different regions. In some regions, such as the Beaujolais,"primeur" means "new wine", a wine to be drunk in the months following the harvest.
What are the advantages of this system?
The “Primeurs” allow you to reserve wines in advance to be sure of obtaining them, particularly in the case of highly prized or low volume references. This system offers several benefits:
The wines do not undergo successive transports that could alter their good conservation and their authenticity is guaranteed. They come directly from the cellars of the Châteaux, without any other intermediary.
Buying “en Primeur” is the possibility to save money compared to the final price of the wine two years later when it is released on the market. The buyer benefits from the natural value of the wine and the risks linked to market fluctuations are minimized.
Buying “en Primeur” gives access to a fixed price, outside the law of competition. Indeed, the Primeur prices are fixed by the Châteaux.
This system allows for a purchase called a "forward purchase". This is a purchase in which the terms are agreed on the day of the transaction, while the transfer of ownership, delivery and payment of the price will take place at a later date agreed upon by the parties. On its side, the property gets an immediate cash advance.
What are the points to watch out for when buying “en Primeurs” wines?
The “Primeurs” system has a few limitations:
During the “Primeurs”, the tasting conditions are sometimes difficult. The wines are still fragile and can vary quite rapidly.
The soaring in the prices of great wines sometimes questions the price advantage of buying “en Primeurs” wines.
The "control" of certain critics or tasters may lead to fears of a lack of objectivity or to a certain bias.
However, the ageing of the wines allows the value of the vintages to increase over time. In addition, the “Primeurs” week brings to the Bordeaux region a great recognition and a worldwide visibility.*
What profile for the 2021 vintage?
At the time of this interview, the “Primeurs” week has just ended. After three exceptional vintages in 2018, 2019 and 2020, 2021, it was going to be more complicated in many ways. Indeed, this year was marked by all the phenomena feared by the winegrowers: frost, mildew, summer with little sunshine, not to mention the geopolitical context.
The quality of the terroir and the work of the winegrowers should still allow for some very good surprises. A vintage which will be heterogeneous and where risk-taking will reward certain producers. However, quantity will not be available, some appellations and some producers having suffered significant losses.
We invite you to contact your Private Banker to learn more about our Wine Banking solutions.
(1) Wine Banking is a Société Générale Private Banking expertise. It includes a set of services provided by our partners, experts in the world of wine, designed to help you realize your projects, whether they are related to land (vineyards) or bottles.
Would you like to discuss this subject further with us?
WARNING
This document is an advertisement and has no contractual value. Its content is not intended to provide an investment service, nor does it constitute investment advice or a personalized recommendation on a financial product, nor insurance advice or a personalized recommendation, nor a solicitation of any kind, nor legal, accounting or tax advice from Société Générale Private Banking France.
The information contained herein is provided for information purposes only, is subject to change without notice, and is intended to provide information that may be useful in making a decision. The information on past performance that may be reproduced does not guarantee future performance.
Before subscribing to any investment service, financial product or insurance product, the potential investor (i) must read all the information contained in the detailed documentation for the service or product in question (prospectus, regulations, articles of association, key investor information document, term sheet, information notice, contractual terms and conditions, etc.), in particular those relating to the associated risks; and (ii) consult his legal and tax advisors to assess the legal consequences and tax treatment of the product or service being considered. His private banker is also at his disposal to provide him with further information, to determine with him whether he is eligible for the product or service envisaged, which may be subject to conditions, and whether it meets his needs. Consequently, Société Générale Private Banking France cannot be held responsible for any decision taken by an investor based solely on the information contained in this document.
Predictions about future performance are based on assumptions that may not materialize. The scenarios presented are estimates of future performance, based on past information about how the value of an investment varies and/or current market conditions, and are not exact indications. The return obtained by investors will vary depending on market performance and the length of time the investor holds the investment. Future performance may be subject to tax, which depends on the personal circumstances of each investor and is likely to change in the future.
For a more complete definition and description of risks, please refer to the product prospectus or, if applicable, other regulatory documents before making any investment decision.
A subtle blend of cultures
Interview by Laurent Issaurat, Head of Art Banking Services at Societe Generale Private Banking, with Sabrina Dolla,...
A new take on travel
