En primeur: beware the heralded vintage?

From an investment point of view is it best to buy the “vintages of the century” en primeur or later?

Wine Asset Managers’ sifted through the data for its latest blog post and found that in terms of performance, seven of the last fourteen campaigns have seen en primeur releases outperform their relevant back vintages and vice versa for the other seven.

WAM explained: “We have looked at the performance of the first growths for the last 14 en primeur campaigns since their release and compared them with the performance of the existing back vintages that were also available for investment at the time of that particular release and compared them up to the present day e.g. for the 2000 vintage we have compared the performance of the first growths since first release with selected back vintages from 1982 to 1999, up to the present day.”

Unsurprisingly perhaps, six of the best seven wines to have bought en primeur came from the vintages between 2000 and 2008, while the worst performers have come between 2009 and 2013.

However, in a line-up that includes the 2000, 2003, 2005, 2009 and 2010 vintages, only the 2000 has (so far) outperformed existing vintages that were available at the time of its release.

The 2005s may yet and interest in them is rising as Robert Parker’s 10-year retrospective looms but since peaking in 2008 they’ve declined and are widely available on paper for their 2006 release prices.

The 2009s and 2010s meanwhile also have this potential but, with the occasional exception, continue to decline in price to a level the market finds acceptable.

“Beware the heralded vintage,” warns WAM, which added: “The last instance of a stellar performing release was the 2008 vintage, offered in the spring of 2009, that was priced at a time when the global economic and financial outlook was gloomy and uncertain. Far from going into decline, the wine market then went on a two year China-driven boom culminating in the madness of the 2010 release.

“The market and the producers are still adjusting to the bust, the latter being scarred by the cheap release of 2008, the former scarred by the excessive release of 2010. The worst relative performance of an en primeur release versus the market is actually the most recent one, 2013, released in the summer of 2014, which has dropped c.20% while the secondary market since then has stabilised and returned a positive 2% gross. This is rather unfortunate for those wishing to instil some confidence back into the en primeur market.

“While investors have always looked at the back vintages as well as en primeur, there is now a much greater sense among consumers of Bordeaux that the secondary market is as good a place to buy as first release. And of course they are having to compete not just with the Burgundy release but also the increasingly popular Italian releases, the timings of which are quite random, and wallets are often quite drained by the time Bordeaux en primeur comes round.”