Bordeaux’s continuing use of the en primeur system has turned its main product from bottled poetry into an investment vehicle.
There’s nothing inherently wrong with that. I drink wine, and I also buy stocks and mutual funds. A good investor tries to do the latter dispassionately. It doesn’t matter if a drug company donates samples to the poor or jacks up prices when it has a patent monopoly; what matters is the return on investment (ROI). I’m not here to run down capitalism: that’s how it works.
That’s what first-growth Bordeaux is now. You won’t find oenophiles drinking it, and that’s reflected in mainstream media coverage of Bordeaux’s annual en primeur sales pitch. People brag about the ROI of buying early, or lament if post-release prices, as with the 2009 and 2010 wines, are actually lower than the en primeur prices.
In fact, I’d like to quote Wikipedia for the advantages: “The market has now turned and buying en primeur has become attractive once more. Indeed, those who bought into top wines of the 2014 vintage are now reporting average ROI of +13.4% with the wines soon to be released in bottle.”
Bully for you! Thirteen-point-four percent ROI! Why don’t you also tell me about how well your mutual funds are doing? Don’t mind me, I’ll just be drinking this nice British Columbia Bordeaux blend I bought. What’s the ROI? Well, I paid $60 for it and I’m going to drink it right now. So, my ROI is, what, negative infinity? I AM an idiot! You’re so right!
And, no, you can’t have any of my wine.
If you haven’t heard of en primeur, I envy you. Here’s how it works.
Bordeaux’s wineries open their doors for about a week each spring for planned barrel tastings of their nascent vintages. Some of the tastings are convenient groupings of wineries: a big group of, say, Fronsacs in one place. But the top (“first-growth”) wineries don’t participate in these group tastings, so wine writers have to make individual visits to their cellars. There, they can be pampered and flattered while they assign supposedly objective ratings — not blind-tasted of course, since that’s not possible when there’s only one wine to taste. And these ratings ultimately determine how much the wine will sell for.
That may sound like a recipe for corruption, but I have met many wine critics and châteaux owners and I can testify that none of them would ever, well most of them would never … let’s move on, okay?
Bordeaux’s en primeur season has long been a cattle call for wine writers from London, because they can be there in a couple of hours. Until Robert Parker came onto the scene, it was a chummy little English club. People wrote insidery, often indecipherable notes about the vintage (“the ’79s aren’t as precise as the ’78s but they have a certain shaggy charm”), and the upper crust generally bought futures of the same exact wines they had been buying all along. En primeur moved the prices, but not immensely.
Side note: hard as it is to believe, there was a time when wine lovers carried a small Bordeaux vintage chart in their wallets. Hahahahaha. We’ll revisit this anachronistic practice later.
First, let’s talk about Robert Parker.
Parker, a lawyer from Maryland who first produced a photocopied and stapled wine newsletter, boasted that the '82 Bordeaux, which English critics had panned, were in fact great wines. He applied his 100-point scale and gave these wines very high scores. English critics scoffed.
Whatever resistance the Bordelais initially had to this outsider grading their wines like a school paper faded as soon as they saw how much Americans became willing to pay for them.
Bordeaux was the first major wine region to accept and even venerate Parker. And why not? He became their greatest salesman, so great that he has been awarded France’s highest national honour, la Croix de chevalier de la Légion d’Honneur. They don’t give out the Croix for writing incisive tasting notes.
Parker has maintained a symbiotic relationship with Bordeaux’s châteaux. If he gave a barrel sample a 98, the winery could, and would, jack up the price. If he called it “disappointing” — an increasingly rare event as his career advanced — the winery had to sell at sacrificial prices.
At this point, it’s probably worth pointing out that the en primeur system didn’t start off as a vehicle for milking the luxury-wine market.
The concept dates back to the 1600s, when Dutch merchants flush with cash paid grape growers in advance of the harvest. For centuries, vineyard owners in Bordeaux were satisfied with this: they got their money and didn’t have to worry so much about the vagaries of weather. They would pick the grapes and ferment the wine in barrels, but at that point, négociants (dealers) would buy the wine, blend it and bottle it, usually putting their own names on it.
In the 1920s, Baron Philippe de Rothschild thought that he could make more money bottling Mouton-Rothschild himself. He would have greater quality control and, though he had to sit on the inventory longer, he could charge more for bottled wine than wine in a barrel, which might be blended with anything. One of his main motivations will be familiar to Bordeaux consumers today: he wanted to cut down on counterfeits.
He didn’t dispense with the en primeur system, though, nor did the other first-growth owners, even as they quickly saw the value of bottling their own wine. Installing bottling lines was expensive, and growers were used to cash up front.
The rest of France gradually learned to sell its own wines, even Burgundy, a region of small farmers that was much slower to transition than others. The Bordelais became complacent, but by 1982, it was fair to wonder what the point of the Bordeaux en primeur system was, and whether it would survive into the next century.
Enter Parker and the 98-point wine. Suddenly people would pay a huge premium for a wine before release based on a single barrel that Parker had tasted. Bordeaux châteaux quickly learned Parker’s palate and the legend is that they could direct him to the barrel he would most like, which is how his ratings after the wines were bottled sometimes came to vary a great deal from the en primeur ratings. For wine lovers, it was caveat emptor. But for investors, an early positive rating sealed the deal for potential ROI.
I want to say this about the legendary “Parker barrel”: I believe that it’s true. Why wouldn’t wineries put their most full-bodied, fruit-forward wine in front of a man known to love them? But don’t blame Parker. Barrel tasting is difficult. The wines are not ready to drink. Great wines can be harshly tannic at that stage. A barrel from grapes that were picked late so they are very ripe is always going to stand out as more drinkable a few months after harvest, even if it might not be the best wine 10 years later. If Parker hadn’t come along to reward early-drinking wines, someone else would have.
Bordeaux has changed immensely from even a decade ago.
Think about the non-Parker writers who slog through dozens of baby wines in Bordeaux every year. No matter how diligent they are — and I know some who are very diligent — these are extremely trying conditions, especially when what you’re trying to predict is the drinkability of a wine 25 years in the future.
This is why scores really matter. If you put five different 25-year-old wines from Bordeaux (or any region) on the table, nobody can predict which will be best. Believe me; I’ve been to that tasting many times. In fact, I went to a tasting last year where a 40-year-old $4 supermarket Merlot from Washington State’s largest producer beat out top wines from Bordeaux and Napa Valley. We were all professional tasters, and none of us expected that.
However, ALL of us knew which wine had garnered the highest rating 35 years earlier. We all knew the pedigrees. And thus, we knew which one would have had the highest ROI. The actual quality of the wine just doesn’t matter; the resale value of that absolutely delicious $4 supermarket Merlot was probably still about $4.
And Bordeaux has changed immensely from even a decade ago. Remember what I said about wine lovers carrying Bordeaux vintage charts in their wallets? There’s no reason to do that anymore, even if you love Bordeaux.
Global warming has had a huge impact on a region that used to be marginal, meaning some years were good, and some years were bad. Bad vintages in Bordeaux used to mean cold, rainy summers that led to thin wines that never improved.
Bordeaux might get too hot these days, and a rainy September is inconvenient, but we may never again see the type of vintage that people in the 1970s would have called “bad.” Buyers don’t have to beware of anything. Wineries, especially the top ones, have the technology to ensure that every year’s wines are solid.
So, how does that affect the buying of futures for wine lovers? It was very important to buy 1982s if the ’80s, ’81s and ’83s were all significantly less good. Now, though, every year is at least decent, and Bordeaux had three “vintages of the century” in the ’00s alone. You don’t have to worry that if you miss out on this year’s wines, you won’t have any good Bordeaux for several years.
Moreover, for most people the wine world is just bigger than it used to be. Maybe you don’t like Napa Cabernet. It uses the same grapes as Bordeaux but the style is different. I get it. Then you should try Coonawarra Cabernet, or a top Chilean Cabernet. Or maybe you’d like to change gears and have a Super Tuscan? For wine lovers, there are just so many choices. Why buy cases of just one wine, years in advance, when you can sample everything the world has to offer?
Why? I’ll tell you why. Those other wines, they’re not for ROI. As good as Chilean Cabernet is, there’s not much resale value on the auction market. Yes, you’re right, I AM an idiot for preferring this really delicious bottle of wine right now to something that will be worth 17 percent more in five years.
And, no, you still can’t have any.
THESE ARE THE CONS... SO WHAT ARE THE PROS OF EN PRIMEUR? Michael Apstein shares his perspective here.