Investing in a French Vineyard in Languedoc Roussillon

Investing in a French Vineyard in Languedoc Roussillon

Buying your own French Vineyard

If you have read the French press over the last few years, you will be aware that despite a sense of crisis among traditional vine growers, a new wave of talented, young entrepreneurs have come into the Languedoc-Roussillon wine trade recently – and are making a success of it! We take a look at what it takes to acquire a vineyard and to make it a profitable venture.

The Languedoc is one of the most extensive vineyards in the world despite successive grubbing programs. And the fact that there are still vineyard opportunities at relatively acceptable prices, combined with the region’s Mediterranean climate, the quality of its natural environment, and its proximity to the coast, means that the regions are still attractive to foreign investors that is helping to stimulate the agricultural property market.

Vineyard grapes

It is no surprise, therefore, that a large proportion of new vineyard owners are British – perhaps the Ryanair phenomenon has contributed in part to this growth. But there are also Bordeaux and Burgundians investing in the region as vineyards become too expensive in those areas, or they want to expand but elsewhere. Many newcomers manage to develop a successful business, although it can take up to three years before you begin to reap a profit. One such success story is that of Domaine Begude whose owners, a young couple who moved to the Languedoc from London where working as city bankers was taking its toll, have created a successful wine brand now selling at Waitrose and Majestic Wines.

However, the viticultural land market in the region is a complex story, with a large disparity in the prices of vineyards depending on where you are buying – certain terroirs command a higher price whilst others have a greater market potential. For example, the price ratio can range from one to ten for appellation terroir such as the Muscats of the Aude (7600 euro/ ha) and the Tavel area (79 000 euros/ ha) in the Gard. This is why future investors should seriously consider using the services of specialist agencies who can decihper the market potential for you, and who can also put you in touch with viticulture consultants who can advise you in the technologicanl knowhow that is needed to produce good quality wines.

What budget do I need in order to buy a vineyard?

A dream property with 20 – 40 hectares with a vigneron’s house in the centre will cost around 600,000 euros but this can go up to 1.3 million euros. Sometimes it may be necessary to start production from scratch, as machinery will be out of date or the vines may need to be changed. Often a vineyard is bought as a going concern with existing staff.

What about the “Wine Crisis”?

In the Languedoc-Roussillon there are over 300,000 hectares of vineyards and around 70% of the wine is produced by cooperatives, who pay farmers according to the weight of their grapes and the alcoholic content and not according to quality. Many cooperatives are struggling to compete with the quantity produced in countries like Australia and even China or South Africa. The Languedoc-Roussillon region alone produces the same quantity as the whole of the United States of America.
However, due to the falling price of wine and slowing consumption of wine in France itself, the wine industry is continuing to experience a crisis, despite the tearing out of over 85,000 hectares of vineyards in the last fifteen years. Some vine growers are resigned to the fact and are selling their land or converting their land to alternative use.

Price of a Vineyard

The price of a vineyard depends on the wine that is grown in that area – current prices are around 5,000 to 20,000 euros per hectare depending on the appellation and the condition of the vineyard.

What do I need to know about the buying process?

Before buying, several checks need to be made: satellite surveys are carried out to check the area of the vineyards; the winery is checked for contamination; the vines are examined for viruses; pre-emption rights need to be ascertained, and an application made to the Chamber of Agriculture for the authorisation to farm, which can takeuo to six months.

Anything else?

• Buying a vignoble is an investment in Patrimoine (local heritage). Prices are therefore lower than those for property. However, agriculture houses or property are not subject to wealth tax.
• You can make reasonable wine on any soil.
• 20 hectares will produce around 130,000 bottles of wine.
• Avoid frost and flood zones.

Finally, running a vineyard is hard work but fun and very rewarding! If you are serious about exploring vineyard investments you might want to first consider contacting Vinecole – the specialist wine school based south of Carcassonne offering seminars and courses on all aspects of the wine industry, including seminars specifically aimed at those looking to invest in a Languedoc-Roussillon vineyard.

2009, this article has been updated from a previous article written by Helen Jennings

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