Vineyard Prices in France 2016
Friday 06 October 2017
Vineyard prices in France rose by an average of 3.8% last year, with prices anything between €5,000 and €5 million a hectare.According to SAFER, (Société d'aménagement foncier et d'établissement rural) there were 9,190 vineyard sales in 2016, in line with the total number of sales in 2015.
However, the surface area sold was down 4.4% to 15,580 hectares, with a total sales value of €783 million (-2.6%).
Prices rose by an average of 3.8%, much the same as 2015, with the average price for a hectare of an AOP vineyard outside Champagne reaching €67,500 a hectare.
It is a figure that disguises huge variations between different appellations and classifications, notably between Appellation d'Origine Protégée - AOP and Indication Géographique Protégée - IGP); the prices of non-AOP vineyards are substantially lower than those of their AOP equivalents.
Last year, the average price for a non-AOP vineyard was €13,400/ha, an increase of 2.2% on 2015, the sixth consecutive year when prices have risen, having fallen by an average of 27% between 2000 and 2010. The change in fortunes owes much to the revival of vineyards in Languedoc-Roussillon, which accounts for 70% of all non-AOP vineyards in France.
Around one quarter of vineyard sales last year were to non-agricultural buyers, mainly to foreign investors.
However, the market is a complex one, very often a closed market only open to friends, neighbours, relatives, and existing tenants, or those who have a fortune to blow.
If you do not want the responsibility of managing a vineyard, but you may be interested in investing in one, then it is also possible to buy shares in a Groupement foncier viticole (GFV), an investment vehicle that allows shareholders to collectively own one or more vineyards, which is then run by the winegrower on a farm tenancy. There are tax breaks available for such investments, but caution is needed as the returns are generally modest and it is a long-term investment. Needless to say, good quality, independent professional advice is essential.
A summary review of the vineyard market in each region will amply demonstrate the need for caution and the variations in the market.
In Alsace, prices in the region range between €50K and over €300K per hectare. Last year, there were 780 vineyard sales, and the average price per hectare fell 2.3% to €124,000.
Bordeaux prices rose on average by 3% to reach €92,200 per hectare, but with enormous differences in the region. Highest prices for vineyards are in the Paulliac appellation at an average price of €2 million a hectare, followed by Pomerol where prices rose 18% last year to reach an average of €1,300K/ha and Saint-Julien-Margaux at €1m/ha. By contrast, more down to earth prices can be found for Bordeaux Rouge (€8K/ha), or Cotes de Marmandais (€10K/ha) and Bergerac (€15k/ha), but where the profitability of such vineyards is much more uncertain and a significant number of owners are in financial difficulty.
In Burgundy, the vineyards of the Côte-d’Or attract huge interest, from professionals and investors alike. Vineyards here can reach stratospheric prices, reaching a maximum of €12m/ha last year, although most transactions are around €5m/ha, the highest priced vineyards in France. Lower classed Bourgogne Premier Cru can sell at anything between €250K/ha and ten times this amount, depending on the vineyard. Cheaper Burgundy averaged €40K/ha in the year. The cheapest Beaujolais vineyards averaged around €11K/ha, but the best were sold for well over €100K/ha.
Vineyards in Champagne have the greatest concentration of expensive vineyards, which sell for upwards of €1m/ha, although many sell for half this price. However, the fortunes of the area dipped last year, when prices of bottles of champagne fell several percentage points, the result of lower sales in France and the United Kingdom, the leading export market for the wines. Vineyard prices also fell by around 1% in the year.
In the vast Languedoc-Roussillon region vineyard prices are more modest, but equally varied, ranging from €10K/ha in many areas, up to €38K/ha for vines of Pic Saint-Loup in the Herault department. Generally speaking, although there was plenty of market activity in the year, prices remained stable across the region, although both Pic Saint Loup and Terrasses du Larzac moved upwards by a few percentage points.
In the Pyrénées-Orientales department the market is more difficult for producers, with a continued lag of demand and competition from over the border in Spain. Vineyard prices were between €8K/ha and €22K/ha at the top end for Banyuls and Collioure.
Vineyard prices in the South-West region are amongst the lowest in France, starting at €5K/ha at in many areas, up to around €45K/ha for the vineyards of the white wines of Jurançon. However, market activity in the is very small (only 180 sales) and vineyard prices remained stable last year, with the exception of vineyards in Madiran, where prices rose 13% to reach €18K/ha due to a sales of a few high quality vines.
The Loire is another vast and varied region, whose performance and outlook is very mixed. Many vineyards can be purchased for well under €10K/ha, rising to €155K/ha for a Pouilly-Fumé vineyard and €145K/ha around Sancerre. Muscadet vineyards were in strong demand last year, rising 43% to €10K/ha. In contrast, the vineyards of Chateaumeillant in Cher plummeted 35% to an average of €11K/ha.
In the Rhone, prices are again very diverse, and many markets are very closed. At the top end, prices for the vineyards of Hermitage and Côte-Rotie averaged €1mK/ha. In Cornas values averaged €450K/ha, whilst in Châteauneuf-du-Pape €390K/ha, and in Gigondas €180K/ha. At the bottom end Côtes du Rhône starts at around €14K/ha, with IGP vineyards lower.
Further south, in neighbouring Provence, the market is dynamic, with strong demand in most areas. Prices averaged €45K/ha, but there are substantial differences in the region. The most successful vineyards are in Bandol, where prices averaged €120K/ha, whilst Cassis averaged €100k/ha.
Prices for individual vineyards may well fall out of these ranges. In addition, in some areas the market is small and local, which will inevitably distort averages for these areas.
The following graphic shows the location of the wine areas in France and the average prices for vineyards within each area in 2016.
Source: Terres d’Europe-Scafr, Safer and SSP
This article was featured in our Newsletter dated 06/10/2017