French Vineyard Prices Up by 11% in 2007
Tuesday 01 July 2008
The price of vineyards in France rose by 11% in 2007, to average €95,000 per hectare, but this figure masks big disparities between regions.
The growth in the price of vineyards is being driven primarily by the Champagne and Bordeaux regions, whilst elsewhere in France, prices remained stable or went down.
In Champagne prices went up a staggering 17% over that of 2006 to reach €734,000 per hectare. Likewise in the Bordeaux region prices rose by an equally impressive 13% to reach €64,400 per hectare.
Beyond the Champagne region there does seem to be a small revival in confidence, contrary to the picture in 2006. The revival in fortunes in driven almost entirely by the export growth of wines as national consumption has continued to decline.
Thus, the price of vineyards in Cognac, (of which 95% of its production is exported) has continued to grow since 2000, after years in the doldrums, with prices that grew 17% in 2007 to reach €21,500 per hectare.
Those vineyards that rely primarily on home consumption for their sales continue to encounter difficulties. In Languedoc-Roussillon and Alsace, vineyards have lost 30% of their value in under 4 years. Prices in the former averaged €10,700, but with large variations within the region.
Thus, in the Coteaux-du-Languedoc at Pic Saint Loup or Terrases du Larzac prices reached €45,000 per hectare, whilst vin de table vineyards in the Pyrénées-Orientales struggled to reach €6000 per hectare.
In Alsace, despite its second position in the ranking, prices dropped by 10% in 2007 to reach €120,000 per hectare.
In the South West prices were generally in retreat, despite some revival in fortunes in the vineyards of Gaillac de Marcillac, Montbazillac and Armagnac.
Vineyards in Centre, the Loire Valley and the Rhône stabilised after having registered a downturn in 2006.
Nevertheless, in Burgundy, prices of Beaujolais went down by 15% over 2006 to reach €13,800 per hectare, a drop of 61% since 2001.
Against the backdrop of continuing difficulties in many French vineyards the French Government (in collaboration with the EU) is proposing a radical shake-up of wine production in France, abolishing many of the rules that have hampered wine, and proposing a change to the labelling and classification of wines to make them more comprehensible to the consumer.
These measures are likely to come too late for many producers, many of whom who also oppose the changes which they fear will further drive down prices.
In Languedoc-Roussillon recent large protests by wine-growers have taken place against the backdrop of a continuing decline in sales and rising costs. In the past twenty years nearly half of the vineyards in the region have been removed but this has not been enough to stem the decline in sales despite significant investments that have been made in the production process to improve quality.
Of course all of this is good news for the wine consumer, for the switch from quantity to quality means many wines from the region and the broader South West are now very good value for money.
There are 886,000 hectares of vineyards in France, the second largest surface area of wines in the world behind Spain. The country produced 47 million hectolitres of wine in 2007, worth around €9 billion. Around half of these wines are exported abroad.
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