Reform of planting rights

I published a Market Intelligence piece in January 2011 explaining the French system of planting rights and the debate surrounding EU plans to abolish them from 2016. There was an interesting note in Vineatransaction’s “Vinea News” April/May newsletter that I received last week regarding the impact the proposed abolition of planting rights might have on land prices. In their opinion there will be a considerable impact on the price of land in “generic” appellations such as Bordeaux, Côtes du Rhône and Val de Loire. In these areas not all of the parcels classified as AOC are planted and they believe that the abolition of planting rights will have an immediate and dramatic impact on prices of older, established vineyards to the benefit of unplanted land within the same appellation.

Currently, existing vineyards in these generic appellations are worth on average between 10,000 and 15,000 Euros per hectare while unplanted AOC land is worth between 7,000 and 9,000 Euros per hectare. With the abolition of planting rights the authors believe that there will be an instant inversion of these values as investors will favour buying bare land classified as AOC that is ready to be planted rather than existing parcels of vines that might require restructuring and thus incur the costs of pulling out the vines, preparing the land and replanting. They believe that the worst affected area will be the Languedoc where 200,000 hectares of vines have been pulled out in the last 20 years and could now be replanted without restriction if these changes to the law come into force.  They conclude that 60% to 70% of France’s vineyards will be affected by the proposals resulting in evident financial implications.

Alexander Hall