En Primeur - Fraud or financial necessity?
The 2000 Bordeaux en primeur marketing machine is in full swing. But Martin Isark argues it is an outdated and at times dishonest system that only benefits a small number involved.
It has been tasted and extolled or vilified. Worldwide, fine wine sellers on- and off-line are carrot-dangling their offers. The vintage 2000 en-primeur Bordeaux juggernaut is on the road. Caveat emptor.
It is high time that this antiquated and creaking vehicle was scrapped for good. The system has obvious flaws. En-primeur wine is not traded on any of the major commodity exchanges, unlike, for instance, pork-bellies or frozen orange juice, which are sold as standardised units. This lack of regulation constantly encourages unscrupulous companies and will do so especially this year, when new and old customers will be seduced into buying the first Bordeaux of the second millennium. As always, some unfortunates will be taken in by these rogue sellers and the reputation of the wine trade tarnished yet again.
And yes of course, they should have been more cautious. And, the professional buyer may well make money, but he will have done careful homework. As Adam Brett-Smith, MD of the traditional merchants Corney & Barrow, the agents for Chateau Pétrus, points out, anyone making this two-year investment should first have checked out the credibility of the seller of the en-primeur with Companies House. Any reputable company will certainly encourage its customers to do the same thing.
The real difficulty is that the Bordeaux château owners are not geared up for selling
Jonathan Stevens of the UK's Farr Vintners, one of the world's largest traders, which expects to sell in excess of $14.3m of en-primeur this year, insists that every buyer should ensure the wine company involved has a long history of such trading and should be very wary indeed of new companies, especially those on-line, unless they are backed by bricks and mortar.
But despite what they advise, even such meticulous research is no guarantee that a company won't go bankrupt within two years. Moreover, the romance of wine, continuing consumer ignorance and the hope for profit continue to be the con-merchant's staunchest allies.
Obviously, everyone in the lucrative en-primeur selling chain speaks up fiercely for its continuance. Négociant Daniel Lawton, of Tastet-Lawton in Bordeaux, argues that he and his kind are indispensable to the selling of en-primeur wine, which in turn generates funds for châteaux, especially in the lesser vintages. He speaks, of course, for the courtiers, négociants, brokers, agents, traditional merchants and wine retailers, who are all doing pretty nicely out of the system.
In truth, en-primeur selling is an anachronism today. Once necessary for the cash-strapped château, the lucrative 1990s have ensured that such financial props are superfluous. This future trading benefits only around 400 of the 7,500 Bordeaux chateaux and the real action anyway is with the top 25 or so blue chips.
Château Phélan Ségur, Saint-Estèphe
Many of the most prestigious châteaux owners are themselves keen on alternative modes of selling. They watch the high prices engendered on the secondary market, and are justifiably aggrieved at the millions of dollars lost in revenue. Château Phélan Ségur, Saint-Estèphe, Bordeaux, has already stopped trading en-primeur. Laurent Gardinier said that while it is still selling most of the wine to the négociant, they are currently considering other options, including selling on-line.
Anthony Barton, the owner of Château Langoa Barton and Léoville Barton, is also amazed at the profits his wines make when they are sold on and is convinced that ceasing to trade en-primeur would not cause serious problems. He estimates the initial cost of around FF100m ($13.5m) could be funded easily. The real difficulty is that the Bordeaux château owners are not geared up for selling. Understandably, this elderly man feels that the next generation must sort that out.
But all these are financial arguments. Perhaps even more important are those concerning the integrity of the wine and of the wine trade. The eventual quality of the wine cannot be truly assessed during the en-primeur campaign. Christophe Salin, MD of Château Lafite, affirms that, even for the experienced, tasting embryonic Lafite is very difficult, and it is much more likely to give a faithful account of itself once bottled.
Certainly, many tasters do increase their scores at this stage. Michael Broadbent, along with most of the world's tasters and journalists, agrees that en-primeur selling should cease, aware as he is of the unjustifiable risk to sellers and buyers. For example, Château Lafite produces 16,000 cases of wine from around 650 barrels (each with its individual nuances), from up to four different grape varieties, from many different plots. Can this one bottle tasted be truly representative of the other 649 barrels?
Wine communicators and sellers round the world who produce authoritative, detailed tasting notes, and perfect scores (Robert Parker - 2000 Cheval Blanc 99-100!) at this stage are conning the public just as surely as the dodgy companies formed for just that purpose.
Obviously, stopping en-primeur trading would cause upheaval. Everyone from the château owner down would have to fund the loss of sales for at least a year, and there might well be those who go to the wall. But with it out of the way, the wine industry would earn itself a more honest reputation.
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