Buy vineyard, Comrades Brezeme make the wine

J

Jeff Grossman

Jeff Grossman
With permission.

Comrade Brezeme is looking for investors to assist in purchasing some new old vineyards in St Julien en St Alban: click (pdf on Dropbox).

As the announcement says: Cost is €50,000 per ha, plus a little more for operations. Yield per ha, to the partners, is 3 barrels of wine.

Eric seeks to keep the number of partners to around 10 but notes that a "partner" could be a cooperative of several smaller investors (...whose internal affairs he would not manage).

Contact Eric for more info.
 
Note that this is not the 'Clos SFJoe' discussed some time ago here. This is a Texier family project, not a crowdfunded project.

Speaking for myself, a whole ha is too much for me but I think it's a topic worth kicking around with a few other like-minded spirits.
 
Hello, Eric, a few questions:

Is the 10.000 working capital a one-time contribution or annual?

Are the three barrels in barrel form or bottled?

For those who cannot take delivery of their three barrels, can you sell them on their behalf?

Would each hectare (or individually owned fraction) receive a separate deed, so that it can be resold later, or would an individual buyer be a shareholder in a single, larger deed, even when purchasing it individually (i.e., not as part of a cooperative, etc.)?
 
50K Euros or dollars?

An entire hectare is also out of my league but can consider a consortium. Oswaldo's questions are very much a point.
 
50K Euros (and 10K Euros working capital) per hectare.

I know at least three people here who are interested in less than half a hectare, so maybe a disorderly hectare is in (dis)order.
 
Well, since I don't really want to be sent right away to gulag, I have to ask permission to the Politburo if I may answer here or privately to each question.

But in any case thanks to Jeff for posting this here and to all of you comrads for asking!

I'll be back soon to you all, one way or an other.

Eric
 
originally posted by Oswaldo Costa:
Hello, Eric, a few questions:

Is the 10.000 working capital a one-time contribution or annual?
Click to expand...

One time. This should be paid back over the 5/7 first years according to yields, etc...

Are the three barrels in barrel form or bottled?
Click to expand...

In barrel, right after harvest.
We can age and bottle the wines and we will charge specific fees for this, that can be paid in cash or in wine.
Roughly, this will be 450 aged, bottled, labled (even to your name since french laws allow it), ready to go bottles.
We will send a more detailed paper to those who ask.

For those who cannot take delivery of their three barrels, can you sell them on their behalf?
Click to expand...
Yes. Same thing than above.

Would each hectare (or individually owned fraction) receive a separate deed, so that it can be resold later, or would an individual buyer be a shareholder in a single, larger deed, even when purchasing it individually (i.e., not as part of a cooperative, etc.)?
Click to expand...

No cooperative here. Each investor will be the full owner of the piece of land he bought. And Domaine de Pergaud or Martin Texier will rent this land.

To avoid a too large number of partner, the minimum is 0.5 ha (and 5000 of working captital), but we welcome any coop/consortium of individuals.

Again contact me by email if you want to get more details. Martin and I are working on it right now, and we should be ready next week or so.
vins@eric-texier.com.
Merci à tous!
 
Thank you, Eric. If you don't mind, I will continue to put some questions to you here in the hope that the answers will attract more candidates than a private exchange.

Two more:
These are presumably young vines, so the ex-cellar price of each bottle, after deducting your fees, will be in the vicinity of 5 Euro, like the young vines SJSA when it first came out?

Aren't three barrels roughly 900 bottles? I had understood that each barrel contains about 225 liters, or 300 bottles.
 
originally posted by Bill Lundstrom:
originally posted by MarkS:
Also, the US Government don't take too kindly to citizens owning foreign assets.
Click to expand...

lots of americans own houses in europe. or do you mean something else?
Click to expand...

Most foreign banks will not allow US citizens to open bank accounts due to new money laundering restrictions. I'm not sure how they might impact foreign real estate.
 
yes, AML laws are very strict but i dont think they prevent real estate investments. i don't know the particulars but a US based group (maybe a LP) or an individual can wire funds to a european bank. a large amount will get scrutinized for sure but it's doable.
 
originally posted by Jay Miller:
originally posted by Bill Lundstrom:
originally posted by MarkS:
Also, the US Government don't take too kindly to citizens owning foreign assets.
Click to expand...

lots of americans own houses in europe. or do you mean something else?
Click to expand...

Most foreign banks will not allow US citizens to open bank accounts due to new money laundering restrictions. I'm not sure how they might impact foreign real estate.
Click to expand...

I have a bank account in France. You really need to to own a house. Opening an account in France is burdensome, but really only bureaucratically so. There aren't legal restrictions.
 
In general, there is no prohibition under US law for Americans to own foreign real estate, foreign bank accounts, foreign corporations, etc. These foreign assets have to be reported properly to the US government on, e.g., the FBAR form, IRS Form 8938, etc.

It is true that some foreign banks are not taking on American clients, and that is the result of the burdens of the bank's compliance with the Foreign Account Tax Compliance Act (FATCA). However, there are foreign banks that will take on American clients. Such banks will require the client to sign a W-9 or W-8BEN.

None of the foregoing constitutes legal advice.
 
originally posted by Oswaldo Costa:
Thank you, Eric. If you don't mind, I will continue to put some questions to you here in the hope that the answers will attract more candidates than a private exchange.

Two more:
These are presumably young vines, so the ex-cellar price of each bottle, after deducting your fees, will be in the vicinity of 5 Euro, like the young vines SJSA when it first came out?
Click to expand...

Oswaldo, I am sure you understand that this is the kind of information that my customers and distributors have the right to ask me to keep confidential... This will be part of the details we'll send to all the potential investors who will ask.

Aren't three barrels roughly 900 bottles? I had understood that each barrel contains about 225 liters, or 300 bottles.
Click to expand...

I certainly need 675l (honestly a little bit more) of wine to make 900 bottles, but also 900 empty bottles, corks, labels, boxes plus 12 to 14 months of ageing (work and depreciation) plus cost of bottling and packaging.
Again roughly, 650l of wine delivered right after harvest, which the usual and official contract for fermage, is worth about the same than 450 bottles ready to be sold, as far as Saint Julien young vines is concerned.
A lot more of Romanée Conti and a lot less of Bergerac from the Coop.
 
In France since 1981, there is ISF (impot sur la fortune) for people with a fortune more than 1 300 000 (real estate, portfolio...).
If somebody invest money in a vineyard, it's possible to have an "abattement" of 75% on ISF ("défiscalisation"). That's why vigneron try to seduce french individual investors.

But much of the "defiscalisation" are bad investement, not speculativ with too much fee. But, people prefer lose money than give to the State.

Here, I don't understand how "a new old" (sic) vineyards in St Julien en St Alban could be so speculativ. I don't understand what to do every year with thousand and thousand bootles of a middle-of-the road estate. Third, if you work on your own vineyard and farmer vineyard, I don't need to ask witch one will receive the best treatment...

Best regards
pierre-alain benoit
 
Understood. I had presumed that the expenses of elevage and bottling would be taken off the ex-cellar price, not the number of bottles, but if it's égal, that's fine.
 
originally posted by Bill Lundstrom:
yes, AML laws are very strict but i dont think they prevent real estate investments. i don't know the particulars but a US based group (maybe a LP) or an individual can wire funds to a european bank. a large amount will get scrutinized for sure but it's doable.
Click to expand...
Well, in addition to real estate, it is quite easy to buy foreign stocks, bonds and currencies. So what's left?
 
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