by Wine Owners
Posted on 2019-05-13
This time of year in the wine trade is always dominated by the Bordeaux en primeur circus. Please see our 2018 ‘In a nutshell' report here. It’s strange really, as en primeur has not made commercial sense for the legions of the swirling and spitting wine trade, let alone the man on the street, for very nearly a decade. En primeur business has shrivelled like a drought savaged grape over the years and there are only a handful of opportunities each year that really make sense. At the time of writing only a few releases have made sense according to our ‘proto-pricing’ (please see jancisrobinson.com), Branaire Ducru, Duhart Milon and Quinault L’Enclos. Palmer sold out quickly (at 2,880 per 12), partly due its rarity (see blog), but also because they have built their brand so brilliantly under the guidance of Thomas Duroux. As a result, Palmer has a strong en primeur following.
In general, the Chateaux are releasing less than ever this year which makes this game ever more senseless. According to one highly experienced trade legend EP is all about building the client base for merchants and clearly the avalanche of similarly persuasive e-mails work to some extent. Experienced wine players are highly selective in the EP arena and returns in the short to medium term are very far and few between. Real scarcity is where it’s at, if you’re hoping for rising prices, and that doesn’t come from en primeur.
| | Level | Month | YTD | 1 Year | 5 Year | 10 Year |
| WO 150 Index | 303 | -0.6% | -2.0% | 6.4% | 57.4% | 83.3% |
| WO Champagne 60 Index | 462.61 | 0.9% | -1.3% | 5.0% | 68.4% | 154.9% |
| WO Burgundy 80 Index | 691.36 | 3.7% | -2.0% | 25.7% | 142.1% | 233.2% |
| WO First Growth Index 75 Index | 276.71 | -0.5% | -2.0% | 2.6% | 45.5% | 71.2% |
| WO Bordeaux 750 Index | 340.71 | 1.0% | 1.7% | 6.3% | 57.5% | 100.3% |
| WO California 85 index | 669.86 | -0.1% | -0.4% | 15.4% | 106.4% | 309.9% |
| WO Piedmont 60 Index | 318.83 | -0.3% | 0.9% | 9.2% | 75.6% | 126.4% |
There were no new themes detected over the month and scarcity is still the biggest driver. Interest in Piedmont is still firm although the monthly movement of the index would suggest otherwise. The same can be said of Burgundy, which is still active but is trading below advertised offer levels, with buyers negotiating harder.
Brexit concerns seem to have been put on hold for now, more through ennui than anything else, which led to some increased activity from U.K. private clients but overall the market trundles along rather than powering up. It’s a time for gentle accumulation on the bid side of the market.
As an aside; several collectors have approached us about reviewing their cellars, mainly to consider what holdings are investment grade and which are not. This has led to most people making the realisation their collections lack structure. The combination of our expertise and the technological support from the platform is proving to be very valuable.
