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En primeur risks "exodus" unless it rebalances, Vin-X boss warns

Published:  17 March, 2015

A fine wine investment expert has warned that the en primeur system risks seeing an exodus of châteaux from the system and negociants going to the wall, unless it gets its pricing "right".

In a blog for, Peter Shakeshaft, founder and CEO of leading fine wine investment specialist Vin-X, argues that châteaux and negociants in the en primeur system have broken "an implied contract" with the market through overpricing the last three vintages.

He argues that since 2009, negociants have increasingly charged prices above those of a comparable vintage, which has squandered support from the market at a time when real pricing is becoming more evident. He claims more châteaux could follow the example of Château Latour, and leave the system, releasing in bottle or exploring different routes to market if the en primeur system doesn't offers investors and buyers sensible pricing.

"A release price at or around that of the 2013 vintage should probably suffice," he wrote, adding to "Unless they get it right now, people will not trust the system."

He also warned that "at least" one major negociant - the middle men who sit between the châteaux and the market - would not survive the coming year as banks were increasingly reluctant to lend them finance. One negociant is already rumoured to have fallen, he added.

The situation had been caused by the falling market, a flat economy, an unwillingness by the negociants to sell at competitive prices and retention of large stocks of "tricky" vintages, which has put increasing pressure on some negociants' finances in recent years.

"It is almost becoming a perfect storm - weak banks, weak French economy, weak take-up and overpriced stock when there is greater visibility of overpricing," he told "

One potential upside was that some there may be some good deals for cash deals as negociants will be in desperate needs of funds, he added. There is also increasing pressure from within Bordeaux itself to redress the balance by pricing wines sensibly and repairing balance sheets "drenched in red ink".

"I like to think they have taken stock of the situation. The en primeur system needs an injection of adrenaline to come forward and I think they are worldly enough to take heed of that," he said, "It could mark the turning point."

He told the situation was "solve-able", but there was a lot of stake. If negociants' balance sheets were "too flimsy" to secure finance, they may not get a look in, he said, and it might reach a point where courtiers - who act between the châteaux and the negociants - put prices up.

"Who will run the risk with clients' money buying from a negociant who is not likely to be there in two years' time?" he asked.  "It is an interesting dynamic. If the banks don't support the negociants, where will that leave how en primeur sees itself? After three years of overpricing, it could be the coup de grâce."