Location, location, location

S

SFJoe

Joe Dougherty
Interesting article in Decanter summarizing a French study (Jeff will have to track it down, I couldn't) on prices of vineyard land.

The prices of land in Burgundy and Champagne seem on a course to change the structure of ownership and raise near-insuperable barriers to the entry of new vignerons.

But what really struck me is the degree of meddling in the land markets. I knew that the government organization SAFER can step in to block the sale of vineyards to someone (actually I guess they have something like an option to buy the land even if you've negotiated a deal with someone else), but I had no idea that they actually did this in 38% of sales. I find that an astonishing number. It is supposed to be to favor young winemakers, but I can't imagine that village politics don't enter into things.
 
"In Marne Cotes de Blanc, average prices in 2012 were e1.56m per hectare...Languedoc-Roussillon, where prices average e11,800 per hectare...."
 
Jean-Marie Fourrier told me last year that because of various other structural aspects in France, it is not interesting for him to acquire more land; that's why he and others have opted instead to become micro-negociants. Interestingly, many, if not all (I don't recall his mentioning the price of land, but he may have), of the reasons he cited had nothing to do with the price of land, but instead were related to matters such as retirement arrangements.
 
There are tax issues at 2 (perhaps 3, depending on how you look at it) stages:

1. Annual income statements, where estates above a certain size/production level have to abide by more ornerous rules

2. Sale/transfer of estate, the undoing of many domaines (especially with high land values or grand grounds)

It's actually a lot safer for both parties to enter into long-term contracts rather than changing ownership of the land. There are some issues with insurance and CAP subsidies but there are consultants who charge a small fee for helping to negotiate those.
 
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