While the rest of us are recovering from the excesses of the holidays and broken New Year’s resolutions, January is a frenetic time for the fine wine market. Traditionally it’s the month for Burgundy En Primeur campaigns when top wines from the region are released for sale while still in the barrel. In a few frenzied trading weeks across January and February Burgundy’s finest and most sought-after wines are sold in this way, with some selling out within hours of being released.
“Buying wine En Primeur is a truly unique opportunity since it allows you to enter the market ahead of the crowd,” explanis Daniel Carnio, Director and Co-Founder of fine wine investment company OenoFuture. “The French term ‘en primeur’ is usually translated as ‘wine futures’ as you’re buying wines before they’ve even been bottled at the winery. This is brilliant news in investment terms because it means you’ll usually get a great price and you can be certain of the provenance and optimal storage of your purchases.”
En Primeur purchases also have the advantage of being relatively low-risk. Although you’re typically buying wines 6-24 months before they are bottled and released, En Primeur prices are nearly always much lower than the price after the wine is bottled. In some cases, prices can rocket to double the En Primeur price or more after the wine is bottled following a positive review from a top wine critic.
Another key advantage of purchasing wines En Primeur is that the wines are not initially subject to VAT and duty. While the wines remain at the winery or in a dedicated bonded warehouse in the U.K. these taxes do not need to be paid. This means investors have less initial outlay and more of their capital can be invested rather than used to pay taxes. It is worth bearing in mind that VAT and duty must be paid on any wines once they leave the winery or bonded warehouse.
“There’s never been a better time to invest in Burgundy En Primeur,” adds Carnio. “Over the past decade the wine collector’s favourite, Bordeaux, has continued to lose market share. According to Liv-Ex during 2019 Bordeaux accounted for just 55% of the market, down from over 95% in 2010.
Much of this ground has been taken by Burgundy as well as other regions like Italy and Champagne. Burgundy’s market share for 2019 hit 19%, beating 2018’s figure of 15%. Demand is especially strong in China and in the U.S. Proof of the region’s potential can be seen in the Liv-Ex Burgundy 150 index which has shown growth of 88% over the past five years. This is a trend which is almost certain to continue given the exceptional quality of the 2018 vintage.”
Sponsored by OenoFuture