What Are Wine Futures?
The practice to sell wine before it’s bottled, commonly known as “en primeur” or wine futures, is well established across many wine regions like Burgundy, the Rhône Valley, Piedmont Port and in particular, Bordeaux. The major châteaux of Bordeaux offer about 80% to 90% of their previous year’s wine production for sale as futures.
Beginning in late March or early April, the châteaus host tastings for the trade to evaluate the potential quality of the vintage harvested during the previous autumn. This is the first opportunity to purchase the new vintage. At that point the wines have just been placed into barrels and are still about two years from reaching the market in bottles.
Over the course of the spring, the châteaux release their trade prices for the vintage based on the initial response to the wines, as well as current economic conditions. It will be interesting to see how this proceeds this spring given the COVID-19 pandemic and the resulting effects on the economy.
The wines first go through courtiers (brokers) who take a small percentage of the cost. Next the right to sell the futures is passed on to the négociants (shippers), who set a new price for the wine, referred to as the ex-négoce price. With very few exceptions, no one deals directly with Bordeaux’s châteaux; they deal with the négociants.
Why Buy Wine Futures?
There are a few advantages of buying wine futures. The wine is often the least expensive at the first release because the margins made by wine merchants are the smallest. It is common for the price of the wine to increase and the margins made by wine merchants to also increase once the wine is offered for sale in the bottle.
Futures may be the only way for individuals to obtain high quality, low quantity, hard to find wine as such wines are often sold out prior to them being available for distribution.
Futures enable an individual to purchase a special wine for a special birth year, or as a gift or for weddings and anniversaries.
Futures enable people to purchase the latest vintage of wines that they like to get every year and where there is generally strong demand, such as Mouton Rothschild, La Mission Haut Brion, Cheval Blanc, Lynch Bages, Montrose, Pichon Lalande, Pontet Canet and Haut Bailly.
Wine futures, like other commodities, can be purchased with the hope or expectation that there will be a return on investment. Those who invest do so to secure high-quality wines at the best prices, but there’s no guarantee that they will be more expensive upon release.
The wines are often not quite ready for consumption at the time they are released for distribution. This then requires the purchaser to have a suitable location to store the wine until it is actually consumed. Suggestions on cellaring wine can be found in my post from August 24, 2019, “Drink or lay down and how to cellar those you keep”.
Since any wine you purchase in this manner won’t be delivered for about 2 years, you will need to keep track of what you ordered, the quantity you ordered, the anticipated delivery date, and how much you deposited and what portion is due on delivery.
Selecting & Ordering Futures
I have purchased Bordeaux futures several times through my local liquor store. Once a year the store releases a catalogue containing all of the wine futures they have access to that particular year. The catalogue provides reviewers comments about each release, a scoring of the wine, the price per bottle, and the number of bottles available.
On the identified sale date, individuals can then order their selections either online or by calling a specified telephone number.
Realizing the Futures
When the wines are released from the winery they will be shipped to the wine merchant, who then contacts the purchaser. Since the wines are packaged and shipped direct from the chateau they are securely packed and often in a wooden crate that clearly identifies the chateau.
The wines can then either be cellared in the crate or placed on a shelf or wine rack until you are ready to enjoy them.