Growing grapes in Burgundy in eastern France keeps getting pricier.
The cost of grand cru vineyards in Burgundy, France’s most-expensive wine property, rose 8.7 percent last year, the 18th annual increase in a row, farm ministry data published on Monday showed. Prices reached an average 4.35 million euros ($4.8 million) for a plot the size of a rugby field.
Burgundy’s grand cru properties Henri Jayer Richebourg and Domaine de la Romanee-Conti produce the world’s most expensive bottles, based on a ranking by Wine-Searcher. The rising vineyard values compare to a stagnant market in Pauillac, the priciest area of the Bordeaux wine-growing region.
“Burgundy has been the hot market for the last three years and Bordeaux has been in the doldrums,” Miles Davis, a partner at Wine Asset Managers LLP in London, said by phone. “If you look at bottle prices, Burgundy has massively outperformed.”
The relative scarcity of vineyards in Burgundy with grand cru classification contributes to property price inflation, according to Davis. Burgundy has 559 hectares of grand cru vineyards and 3,326 hectares of first growths, together making up about 14 percent of the region’s total grape-growing area, according to regional wine board BIVB.
The vineyards are a patchwork of 1,247 named plots called climats dating back to Roman times. Burgundy’s wine makers say a combination of soil, exposure, micro climate and farming methods, known as “terroir,” give wines from each plot a unique character.
“Quite often in Burgundy it’s one or two strips of vines rather than a whole vineyard,” Davis said. “The supply is very much greater in Bordeaux.”
Of the world’s 50 most expensive wines, 39 are from Burgundy, according to a ranking by Wine-Searcher drawn from a database of 7.1 million prices. The list is headed by Richebourg, whose Grand Cru carried an average price tag of $15,184 a bottle.
Burgundy grand cru vines traded for between 2.1 million and 10 million euros a hectare (2.47 acres) last year, the ministry said in a report. Average prices rose from 4 million euros a hectare in 2013 and have climbed every year from 1.22 million in 1996.
“Winemakers in Burgundy are finding it extremely difficult to recover their cost,” Davis said. “It’s very much a long-term investment.”
In Bordeaux’s Pauillac wine region, home to Chateau Latour and Lafite Rothschild, average vineyard prices were 2 million euros a hectare, unchanged from 2012 and 2013. In Champagne’s most-expensive Cote de Blancs appellation, average wine-property prices were little changed at 1.57 million euros a hectare.
Among Burgundy’s first-growth vineyards, considered a level below grand cru in prestige and quality, the price for a plot of white-wine grapes in Cote-d’Or rose 5.5 percent to an average 1.34 million euros a hectare last year.
For all of France, excluding Champagne, the cost of vineyards with a protected designation of origin rose 2.9 percent to an average 61,300 euros per hectare.