En Primeur is often seen as a high-risk area for traders of fine wine. Bank guarantees are difficult and expensive to organise outside of Bordeaux, where the En Primeur system is not well understood. With this in mind, Liv-ex has teamed up with an insurance company to design an En Primeur Advanced Payment Bond. This innovative new product is a simple and low-cost alternative to bank guarantees. This will provide companies of good financial standing with new opportunities to supply (or top up limits to supply) En Primeur on Liv-ex’s trading platform. Another advantage of the Advanced Payment Bond is that it doesn't tie up balance sheet capital like equivalent banking products.
For the time being, the EP Advanced Payment Bond will only be available to UK companies, but we hope to be able to expand its reach in due course. As well as enabling trade on the exchange, the product could one day become an industry standard.
For up-to-the-minute coverage of news and release prices, visit the Liv-ex En Primeur Pages. You can also keep up with all of the latest news from Bordeaux by following Liv-ex on Twitter (@Livex) and Facebook (www.facebook.com/Livex.Fine.Wine.Exchange).