While a small minority have made greedy increases in price, the vast majority have not, but land prices are a different matter. These have gone ballistic. The scramble for top vineyards makes the fight for premium real estate in Chelsea and Knightsbridge seem as polite as a tea party. Take the risible case Chateau de Gevrey. This crumbling domaine which went on the market for E5 mill. The asking price was offered by a consortium of the Gevrey growers, but to steal the deal a casino magnet from Macao, put 8 mill on the table. Such unseemly gazumping, is hardly fair play, but you might think the village would be delighted by their own vineyards doubling in value by association. No, they were anything but pleased. It’s simply not in their interest to have Bond Street prices for grand cru land.
Here are some numbers, if you have the stomach for them. Land is sold in Ouvrie, which equate to 428m2 (24 in a hectare). This represents less than one 228l barrel of fruit; so less than 300 bottles. An ouvrie of premier cru status vines in Vosne Romanée may cost between E100,000-200,000 and grand cru E500,000 to 1.5 million+. Word has it that an ouvrie of Chambolle Musigny, Grand Cru, Le Musigny sold for more than E2.5mill. This for a parcel of grapes which would produce less than 300 bottles a year.
The dark reaper hits hardest with succession taxes. It could be a poisoned chalice, not a brimming cup of wine, which domaine owners bestow to their kids, who may not feel the same connection and loyalty to the land. There are easier careers to pursue. It’s hard graft being a vigneron, tending vines in foul weather and in reality the payback, for the majority, is modest.
Short crops and renting
Tough old mother nature has not been kind with a run of small harvests in Burgundy. Yields have ranged from 25-80% below average ever since the lusciously ample 2009 vintage. While new world vineyards churn out vintages with glorious predictability courtesy of fecund soils and sunshine, in Burgundy frost, virus and above all hail storms wreck havoc on a regular basis. In recent vintages vineyards in the villages of Volnay, Pommard and Beaune have suffered almost total wipeout from hail, but pretty much everyone has been affected to some degree.
The untold real estate story in Burgundy is of too little wine to repay interest on bank loans or to pay the rent on a vineyard. Much land is rented in Burgundy. These domaines may get by in small vintages if they crop share with the owner, but most dish up the readies in rent.
Jean-Marie Fourrier is typical in wanting to expand his domaine to pass on a business to his children, which will still be healthy after they have paid considerable taxes. He considers the options in the following film.