French vineyard prices 1991-2013

The French Ministry of Agriculture recently published a study of the changes and trends in vineyard prices between 1991 and 2013. Their report found that while the average price of French AOC vines has risen significantly during the period – by 75% in constant terms and by 29% taking into account inflation – there are significant variations at both a regional and local level and the overall increase was the result of significant price increases in a small number of the most prestigious appellations.

In 2013 the average price per hectare varied from just 12,000 Euros in the Languedoc-Roussillon to 142,000 Euros in the Burgundy-Beaujolais-Savoie-Jura region. For most regions the first part of the 1990s was characterized by a fall in vineyard prices, with the low-point reached around 1995–1996. Most prices rose in the second part of the 1990s thanks to a combination of low interest rates and increases in the price of wines and in the volume of exports: between 1996 and 1998 exports of French AOC wines increased by 29% in volume and 45% in value. Between 2003 and 2006 vineyard prices fell again in most regions before starting to recover in recent years.

The evolution of prices over the 1991–2013 period shows considerable differences between the main wine regions. The Bordeaux-Aquitaine, Burgundy-Beaujolais-Savoie-Jura and Alsace-Est regions all saw increases in average prices of at least 50% over the period while prices increased by just 3% in the Languedoc-Roussillon and fell by 21% in the Sud-Ouest region. Furthermore, within most regions there were significant discrepancies between different appellations, with a small number of prestigious appellations pushing up average prices.

French Vineyard Prices 1991-2013 (graphics)

Bordeaux

This phenomenon was particularly marked in the Bordeaux region, where the average price per hectare increased by 25% between 2000 and 2013. This was the result of significant price increases in some of the most prestigious appellations, notably Pomerol, Margaux, Saint-Julien, Saint-Estèphe and Pauillac. Between 2006 and 2013 the average in these appellations more than doubled from 390,000 Euros per hectare to nearly 810,000 Euros per hectare. Average prices in Pessac-Léognan also increased significantly in the last few years, from 170,000 Euros per hectare in 2010 to 450,000 Euros per hectare in 2013. This extraordinary increase was driven by a small number of acquisitions by Grand Cru Classé estates and wealthy individuals, such as the acquisition of Château Les Carmes Haut-Brion by Patrice Pichet in 2011 and the sale of Château Le Thil Comte Clary to the Cathiard family (Château Smith Haut Lafitte) in 2012. In Saint-Emilion, while average prices have remained relatively stable since 2010, at 200,000 Euros per hectare, some vines changed hands for as much as 1,100,000 Euros per hectare in 2013 while others sold for as little 130,000 Euros per hectare, with leading estates prepared to pay a premium for parcels of land in the best locations within the appellation. In the rest of Bordeaux the picture is very different, with average prices remaining stable or even falling during the same period, notably in Sauternes, Graves and Fronsac.

Bordeaux Vineyard Prices 1991-2013 (graphics)

Burgundy

The picture in Burgundy is similar, with an average price per hectare of 230,000 Euros in 2013, a 5% increase on the previous year. In the Côte d’Or prices have been rising steadily since the 1990s driven principally by increases in the most prestigious appellations. The average price per hectare of Grand Cru vineyards was 4,000,000 Euros in 2013 and Premier Cru vineyards and communal appellations in the Côte de Nuits and Côte de Beaune have all seen steady price rises since the mid 1990s, with Premier Cru Blanc vines selling for an average of 1,270,000 in 2013. However, vines in the generic Bourgogne AOC have only seen moderate price increases in recent years and at 35,000 Euros per hectare are selling for the same average price as in 1992.

Burgundy Vineyard Prices 1991-2013 (graphics)

Rhone

In the Rhône valley, the top appellations, such as Côte Rôtie, Hermitage and Condrieu, have seen significant price increases since 2010. Elsewhere in the region Gigondas and Châteauneuf du Pape have seen more moderate increases over the same period, while prices in the generic appellations have stagnated or fallen: in the Drôme one hectare of vines in AOC Côtes du Rhône sold for an average of 13,000 Euros per hectare in 2013 compared to 31,000 Euros per hectare in 2000.

Champagne

Champagne is the only major region where vineyard prices have risen steadily across the board since 1991. In 2013 the average price of vines used in the production of Champagne was 1,077,000 Euros per hectare; varying from 798,000 Euros per hectare in the Aisne to 1,565,000 Euros per hectare in the Côte de Blancs in the Marne. These figures represent a stabilization of prices following steep increases between 2011 and 2012, which were driven by a rebound in Champagne sales following the economic crisis of 2008.

The report concludes that two principal factors typically explain the long-term evolution of agricultural land prices: changes in interest rates (which are inversely proportional to the price of land) and agricultural revenues.  As with other agricultural land, the price of vineyard land, which fell during the early 1990s, rebounded again from 1995. However, since the 2000s, the link between the price of vines and interest rates seems less evident, with interest rates and vineyard prices having risen simultaneously.

Amongst the appellations in the study, variations in the price of vines and the price of wines were quite similar in the long term. However, since 2005, when the prices of wines have generally risen, vineyard prices were either stable or fell, with the exception of the most prestigious appellations. This is particularly evident in the Côtes-du-Rhône and the Languedoc-Roussillon appellations.  In the first half of the 2000s vineyard prices were aligned with wine prices but in the second half of the decade the price of wines increased while vineyard prices remained stable or fell. Similarly, in the Beaujolais region vineyard prices started to shift downwards before wine prices, with the fall more marked in the generic Beaujolais AOC than in the Beaujolais Villages AOC. Despite a recovery in wine prices since 2006/2007, vineyard prices have remained at these lower levels.

In the Gironde and in the wider South West changes in the price of vineyards and wines have been relatively similar over the long term. In the Gironde in particular, the evolution of vineyard prices has tracked wine prices quite closely, typically with a three-year delay. However, for certain appellations, notably generic AOC Bordeaux red and white, the link between vineyard prices and wine prices appears to have slackened since the middle of the 2000s and recent increases in wine prices have not been replicated in the price of vineyards.

Alexander Hall
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