How much would you pay for a bottle of 1995 Latour? If I told you that the bottle had remained at the Latour estate since it was bottled nearly two decades ago, would you be willing to pay more for it than a bottle that had passed through dozens of hands?
In 2013, collectors had to make this exact choice after Latour decided to drop out of en-primeur sales altogether and sell off older wines from 1995 instead. Latour held onto the 1995 bottles, waiting until they reached peak drinking age, then sold them directly to collectors as ex-château wines.
But what are ex-château wines?
What Are Ex-Château Wines, and Should You Invest?
Sometimes called “ex-cellar wines,” ex-château wines are stored in the winery’s cellar until they are sold directly to collectors. This differs from the typical process where wine is sent from the producer to a distributor and then shipped to various buyers. Bypassing distributors limits the number of hands and miles the wine must cross in order to reach its destination.
This is perhaps the greatest benefit of buying ex-château wines—few options offer such high potential for preserving perfect provenance.
So, what are the other benefits of buying ex-château wines? Here’s a summary—along with a few risks you should consider before investing.
Benefits of Buying Ex-Château Wine
Risks of Buying Ex-Château Wine
What are ex-château wines? In short, they are opportunities—they offer the chance to buy high-quality wine with little risk and the potential for high reward. Of course, the significance of your ROI will depend on how effectively you can navigate the ex-château landscape.
Investing in Ex-Château Wines
While hunting for an ex-château wine, you might find a bottle selling for the current market value or even less. Most of the time, however, you’ll pay more for ex-château wines. Expect to pay about 10 percent above the current market value on any ex-château wine, especially those wines from sought-after producers or vintages.
If you’re not prepared to spend slightly more on an ex-château wine, you may want to look into wines sold on the secondary market instead. However, if you are ready to pay a little extra for the benefits that accompany ex-château wines, the following tips can help you get the most out of your investment.
Tip #1: Research Wineries
Lauded estates like Latour and Mouton Rothschild are not necessarily the best ex-château wines to buy initially since they usually charge far more for their bottles than lesser-known producers. Collectors not yet familiar with which vintages are worth the extra investment also run the risk of investing heavily in an ex-château from a reputable producer only to discover that it’s not selling as well as other vintages on the secondary market. If this is your first time buying ex-château wine, try purchasing a few bottles from lesser-known estates.
Seasoned collectors, on the other hand, may want to consider buying ex-château wines from major estates. Even if the bottles cost more upfront, the low likelihood of fraud makes these fairly safe investments. Estates like Mouton Rothschild frequently sell out of every en-primeur wine future, so they sell additional ex-château wines to guarantee bottle authenticity years after the original en-primeur bottles were shipped to buyers.
Tip #2: Consider En-Primeur Leftovers
Sometimes, wineries can’t sell out of en-primeur wine allocations. Although these wines didn’t sell out when they were offered up en-primeur, that doesn’t mean the wines are lower in quality when compared to other wines on the market. In fact, en-primeur leftovers sold as ex-château wines often represent some of the best deals.
For example, in 2012, a negociant sold a number of bottles of ex-château 2001 Château Vieille Cure for much lower than the estimated market price. The wine was high quality, but the estate needed to make room in the cellar for the next round of en-primeur bottles. So, the negociant was willing to let the bottles go for less than what they were worth.
Wines sold as excess after en-primeur are also often sold wholesale. This gives collectors the chance to buy the wine before it reaches wine stores and avoid the wine store markup in the process.
Tip #3: Consider Off-Vintage Potential
Research an estate’s off-vintage bottles before you look into their more sought-after vintages. You can often purchase these wines for less than vintage ex-château bottles. If you plan to resell, it’s important to ensure upfront that your investment will be worth something on the market later. Check that the off-vintage wine is of high quality, and that wine critics did not find a fatal flaw that will make the bottle difficult to sell later.
Often, the best off-vintage ex-château wines come from the Left Bank. Bottles from this region are typically sold at reasonable prices, and they are valuable on the secondary market. First Growth off-vintages, in particular, tend to be less popular than flagship wines but still garner generous profits on the secondary market. For example, an average bottle of Petit Mouton costs about $54 ex-château and sells for an average of 72.6 percent higher on the market.
Once you’re ready to buy an ex-château wine, you’ll want to consider how to keep it in peak condition until you’re ready to sell or pop the cork.
Protecting the Provenance of Your Ex-Château Wines
While simply buying ex-château and having your wine shipped directly from the producer goes a long way toward ensuring perfect provenance, it doesn’t hurt to take extra precautions. What are ex-château wines, after all, if not investments worth protecting?
One good idea is to ship under bond to ensure a trusted shipping company goes that extra mile to deliver your bottles safely to their destination. This is vital for ensuring the provenance of your wine and maximizing the outcome of your investment, whether you choose to drink or resell it.
Additionally, shipping under bond also allows you to avoid a duty tax when reselling your wine on the secondary market. Duty fees are paid upon arrival, and you won’t have to worry about the unwelcome surprise of having to pay additional taxes or other hidden fees. Note, however, that not all wineries offer this option, so it is essential to ask about shipping options before you agree to buy a bottle ex-château.
In addition to shipping under bond, be sure to take a close look at the company through whom you are making your purchase. Do they conduct thorough inspections of wine bottles before selling them to verify wine quality and authenticity? Do they offer professional storage facilities where you can have your wines directly shipped, should you need to cellar them a bit longer? These seemingly small considerations sometimes make all the difference in preserving perfect provenance.
Whether you are starting your high-end wine collection or adding to an established portfolio, Vinfolio is your partner in buying, selling, and professional storage. Contact us today to get access to the world’s finest wine.