WineFi Weekly - Bordeaux En Primeur!

Welcome to the sixth edition of WineFi Weekly👋
Read on for the start of our Bordeaux En Primeur Breakdown
📅 April 29th 2024

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Bordeaux En Primeur Release

What is En Primeur?

The french term 'en primeur' roughly translates as 'the first', referring to wines available during their first release – typically whilst the wines are still maturing in barrel in the winemaker's cellar. This is the first time the new release of Bordeaux wines will be hitting the market, and the first time we see the level at which the producers are pricing them. It is often the most volatile time for the value of a wine as the market decides whether to embrace, or reject the price.

The Bordeaux producers stagger the release of their wines over the coming month or so, each releasing a set quantity at a set price.

Whatever happens, this year’s EP release is going to be interesting. Producers are releasing into one of the toughest markets in a generation, with serious downward pressure being applied to release prices.

Négociants are in a crisis, some are currently facing significant financial challenges, finding it difficult to manage the mounting debt attributed to increased borrowing and storage expenses, compounded by reduced transaction volumes since the 2019 en primeur campaign.

The négociants have been absorbing the financial risk of en primeur – typically taking their allocations of leading wines even where they have been unable to sell them through. Many of them can no longer afford to do; those that can are no longer prepared to do so.

Some leading wineries are working to control the market by setting prices and timing for their releases during the campaign. This coordination is difficult but has been done before, particularly with the 2019 and 2008 vintages, showing that it can be successful. In summary, it all hangs in the balance.

Weather Conditions

Similarities can be drawn between the current situation and that of 2018, despite notable differences in the characteristics of the wines themselves. Just like in 2018, the growing season unfolded in two distinct phases. Initially, there was significant pressure from mildew, followed by conditions in the latter part of the season that offset the earlier challenges.

However, unlike 2018, the disparity between these two phases was less pronounced. In 2023, the mildew pressure stemmed not from excessive rainfall, but from persistent rain coupled with already heightened temperatures.

The latter part of the season, although generally dry and warm, only reached extreme conditions during the final stages of maturation, characterised by Indian Summer weather patterns.

It looks like the vintage will be good overall, great in parts, but won’t set the world on fire. Favourable pricing is crucial for the success of this year’s En Primeur.

What do we think?

The general consensus is that producers will lower prices by 30-35% compared to last year’s release. There is definitely scope for the Bordeaux market to react favourably, especially if the early releases are priced favourably. This could kickstart a successful campaign, where demand is high and buyers are satisfied that they have found value. If this is the case, we will likely see the echoes throughout the Bordeaux market, giving renewed energy to a market that has weathered a troubling last few years.

_{Source: Liv-ex, the Drinks Business}