Wine Investment in South Africa - Cape Wine Academy

15% to the price and sell the wine to their network of worldwide agents, importers,
wholesalers and restaurants ( Kissack, 2011 ).
2.2 Wine futures
Bordeaux producers knew that their wine was greatly improved by prolonged maturation in
barrel, but this might mean several years before any financial return could be realised.
Anxious to realise early income the idea of selling wine in barrel ( some six months after
harvest and before bottling ) was born; with immediate ownership but only future delivery
guaranteed. In fact, the practice of selling wine whilst still on the vine was practiced in
Roman times ( Robinson et al, 1999). This ‘futures’ or ‘en primeur’ option suited both parties
despite more risk on the buyer’s part as they were paying for wine which they then stored
and offered for sale, even if it was from a poor vintage;
‘when we don't have the demand we have to handle the stock for ourselves, so that's
the reason why this is a risky business, really’ ( Tapie, 2007 ).
Négociants that decline some or all of such a vintage may well be ignored by the Châteaux
next vintage;
‘we [négociants] are really an investor because we have to buy. Because if we don't
buy...we do not secure a position for the next vintage’ ( Tapie, 2007 ).
Fortunes were made by speculators buying vintages in the mid nineteenth century and again
in the 1960’s and 1970’s, but the 1997 campaign showed the risk taken by négociants as
they were left with wine worth far less in the market place than they had paid for it ( Claridge,
2010 ).
The en primeur system gives producers immediate income - and Châteaux enjoy having a
guaranteed market for their wines in poorer vintages ( Styles, 2008 ) and can reassure
potential customers that they had got the earliest and best possible price from their
négociant who in turn had got the best and earliest price from the producer. This way it was
possible for négociants to make a profit if the wine was bought early and demand for it
subsequently increased beyond the normal 10% - 15% fee that they would take from any
deal to wholesalers, importers or retailers.
The 1855 classification of Bordeaux châteaux was based on the market value of each
château’s wine and the en primeur system ensured that négociants and brokers would
clamour to purchase as early as possible ( provided the vintage was reasonable and quality
promising ) long before the wine was even released, in order to get the best price, relying on
the knowledge that there would never be enough wine to go round from the key châteaux to
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