Thursday, 21 May 2009

En Primeur Part Two: The Pro's

Arguably, the advantages of buying en primeur are few and far between for the consumer. However for those looking to make an investment; the practice arguably holds great sway. For them, the ability to buy high quality wine from the most sought after regions, for a heavily discounted price makes it a worthwhile process.

As consumers and investors pay before wine is even bottled another advantage is the ability to choose the sizing of the bottle you require. The producer will present the wine however you want it, from a half to a magnum. Whilst this might not be important to some, for some wine enthusiasts the opportunity to buy wine in a magnum, which is a rarity, adds to the draw.

From a producers point of view, the advantages are numerous. Firstly, and for many châteaux’s, most importantly, is the fact that they do not have to wait three years to cash in on that years harvest. This means the chateaux itself has to invest less capital to sustain its business.

Secondly, en primeur wine creates a huge demand within the industry, due to the publicity it receives. The economic laws of supply and demand mean that when there is high demand for a product in low supply, prices will naturally be high if there is a market for them. With en primeur pricing being guided by commentators such as Robert Parker, and regarded as some of the best in the world, it is unsurprising that many producers are able to charge large amounts for wine which isn’t even matured.

Finally, selling wine en primeur reduces the châteaux’s own risk. By selling it before it is matured, producers do not have to concern themselves with the possibility of unsold wine not to the complexity of the original tasting. Again taking away the risk and ensuring a profit!

Tomorrow – the con’s!

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