How to Buy Wine En Primeur: Your Guide to Futures
Updated
Learning how to buy wine en primeur, also known as "wine futures", gives you a way to invest in a vintage while it is still in the barrel. That is typically a year or 18 months before its official release. This method allows you to secure wines that may be in very limited quantities and difficult to acquire once bottled and released to the market. A key advantage can be that en primeur prices are considerably cheaper than the market price after bottling. This is not guaranteed, and some wines may lose value over time. Wine experts like Tom Stevenson recommend buying en primeur for wines with limited quantities. Wine bought en primeur is often placed directly into custom-free storage, known as 'in bond'. However, as with all investments caution due to potential losses and significant incidents of fraud in the en primeur market in both the US and UK.
What is en primeur and how does it work?
En primeur is a method of purchasing wines early, while the wine is still in the barrel, as we describe it. This purchase is made a year or 18 months prior to the official release of a vintage. The process involves merchants and trade organizations tasting barrel samples when the wine is between 6 and 8 months old. In Bordeaux, where the final wine is often a blend of several grape varieties, winemakers craft an approximate blend for sampling. The final composition may differ based on how each barrel matures. Based on these initial samples, the wines receive a preliminary "score" or rating, which influences the en primeur price. This preliminary rating reflects the expected quality of the wine once it is bottled, released, and has had time to mature.
What are the potential advantages of buying en primeur?
Purchasing en primeur offers several potential benefits for you as a consumer. Chief among them is the chance to secure wines that may have very limited quantities and could be difficult to buy after their release. While not guaranteed, the purchase price during the en primeur period may be lower than the price the wine will command at release. For example that the 1982 vintage of Château Latour sold at £250 a case en primeur in 1983. By 2007 its value had reached £9,000. More recently, those who bought top wines of the 2014 Bordeaux vintage are reporting an average ROI of +13.4% as the wines near release. This can make en primeur an attractive option for building a collection or for fine wine investment. You can track the performance of various vintages on our live fine wine market index.
What are the risks and considerations?
While there are potential benefits, buying en primeur carries inherent risks. The potential advantage of wines being cheaper en primeur than at release is "not guaranteed and some wines may lose value over time." The composition of the final wine may also differ from the barrel sample tasted, depending on how each barrel matures during aging. The market has shown volatility. Record release prices for the 2009 and 2010 vintages "tested the resolve of the En Primeur market,". Many who bought into those vintages "were facing losses during the following four years" due to a failure to re-adjust prices. Furthermore that "incidents of fraud in the "en primeur" market have been significant both in the US and in the UK and in the wine investment sector in general." You should always use caution with any investment. Understanding the condition of your wine is also crucial, and you can learn more about wine ullage levels.
Which wine regions offer en primeur?
The wines most commonly offered en primeur are from Bordeaux, Burgundy, the Rhône Valley, and Port. However, other regions are adopting the practice, including Piedmont, Tuscany, Ribera del Duero, and Rioja. We also mention that work is being done in Italy to promote the development of an Italian en primeur market. Bordeaux, in particular, has a long history with this concept, which has existed there for centuries. You can explore specific vintages like Bordeaux 2016 or view a producer atlas by region to understand the geographical context of these offerings.
What are the costs involved in buying en primeur?
Beyond the initial hammer price, several costs contribute to the total price of en primeur wine. These typically include a buyer's premium, various taxes, duties, and subsequent storage and shipping fees.
Here is a comparison of buyer's premium rates from various auction houses:
| Auction House | Wine/Spirits Buyer's Premium | Additional Notes |
|---|---|---|
| Christie's | 25% of the hammer price | For Wine, Spirits and Cigars, VAT is payable on the premium at the applicable rate. |
| Sotheby's | 24% of all hammer prices + 1% Overhead Premium on all hammer prices | For Global Wines & Spirits. |
| Bonhams | 24% of the hammer price | For Wine and Whisky, VAT at 20% will be added to the Buyer's Premium. |
| Zachys | 25% of the hammer price | Unless otherwise indicated. Credit card payments incur a 2% processing fee. |
| WineBid | 17% buyer's premium | Added to the final hammer price of all lots purchased through auction. |
Beyond the buyer's premium, you will also be responsible for applicable taxes. For example, Christie's states that VAT is payable on the buyer's premium, and for some lots, VAT is payable on the hammer price. Sales or use tax may be due on the hammer price, buyer's premium, and/or other charges for lots shipped to the United States. That applies regardless of the purchaser's nationality or citizenship, as Christie's notes. Zachys also states that all bids are deemed exclusive of any sales tax, which the buyer pays. An Indian Equalisation Levy Tax at a rate of 2% will be due on the hammer price and buyer's premium (exclusive of any applicable VAT). It applies to lots bought with a registered address in India via Christie's LIVE™, Christie's explains.
You may also incur excise duties and tariffs. For example, Zachys notes that many imported wines may be subject to tariffs, duties, taxes, or other governmental charges that can change between the sale date and delivery date. You are responsible for any additional fees that arise from such changes. For wine with an alcohol by volume (ABV) between 8.5% and 22%, HM Revenue & Customs (HMRC) sets the duty at £30.62 for each litre of pure alcohol in the product.
Finally, storage and shipping are additional costs. Christie's states that the purchase price is exclusive of any charge for storage from the date of the auction. It also excludes any charge for subsequent packing or carriage. Zachys also notes that you must collect wines within 14 calendar days, or Zachys will move them to its own storage at your expense. WineBid states that it places all purchased wines into storage at Global Storage Network (GSN). You can keep them there, or schedule shipping or pick up at your convenience. Purchases are never shipped automatically. To calculate the full cost of your acquisition, including these variables, you can use our all-in cost calculator.
How does 'in bond' storage affect costs?
Wine bought en primeur is often directly placed into custom-free storage holding, known as 'in bond'. When you choose to buy wines in bond, no excise duty or clearance VAT applies to the hammer price, as stated by Christie's. However, VAT still applies to the buyer's premium (Christie's). You will be responsible for arranging collection by a shipper with a bond movement guarantee or by a warehouse with a customs bond/suspense regime. You also cover any fees the shipper or warehouse charges, Christie's explains.
If you decide to take your purchases out of bond at a future date, excise duty and clearance charges will become payable, Christie's notes. For example, HMRC sets the alcohol duty rate for wine between 8.5% and 22% ABV at £30.62 per litre of pure alcohol.
Non-UK buyers may be eligible to reclaim the VAT on the buyer's premium if certain refund conditions are met, Christie's states. To receive such a refund, a non-UK buyer must have registered to bid with an address outside of the UK. The buyer must also provide immediate proof of correct export out of the UK within 90 days from the date of sale, Christie's explains. Christie's charges a processing fee of £35.00 per invoice to check shipping/export documents. It waives that fee if you appoint Christie's Shipping Department to arrange your export/shipping. For detailed guidance on protecting your wine, consider our storage pillar guide.
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