One third of Bordeaux properties “for sale”21st December, 2011 by Gabriel Stone
As many as one third of Bordeaux’s wine estates are for sale, according to Yvon Mau managing director Philippe Laqueche.
Highlighting the tough situation faced by the majority of producers in Bordeaux who fall below the classed growth tiers, Laqueche remarked: “people are retiring and the next generation don’t want to follow them.”
However, he suggested that this natural shrinkage could have a positive effect on the profitability of France’s largest AOC, suggesting that many of the vineyards being pulled up were on poorer terroirs. “My feeling is that we have too many hectares in Bordeaux for quality and demand,” Laqueche concluded, adding that vineyards close to urban areas were also in demand for real estate development. [See the comment section below for a further explanation from Laqueche.]
Alex Hall, director of Bordeaux property agent Vineyard Intelligence, added context to this statistic, saying: “There are 8,200 producers in Bordeaux – are one third of them on the market? I’m not sure. But in terms of people who, if they thought they could sell, would – yes, probably.”
For the most part, Hall suggested that vineyard owners approaching retirement but who wish to keep their family estate intact are choosing to take up EU or local subsidies in place of grape growing.
Especially for those without their own winemaking facilities, this presents an attractive alternative to the modest prices paid by co-operatives, who receive around 20% of Bordeaux’s grape harvest.
As for the recent flurry of purchases in the region by Chinese buyers in particular – 15 to-date – Hall expressed confidence that there remains “quite a lot more mileage” in this avenue.
He also argued that such acquisitions from foreign, capital-rich investors were a good thing for the region, saying: “New owners are bringing in new markets. These guys are buying what other people wouldn’t be keen on buying. It’s difficult to make money at a certain economy of scale because of distribution.”
However, pointing to the Chinese businessmen who are typically buying Bordeaux properties, many of whom have extensive contacts in their home country’s hospitality industry, Hall suggested that finding a market for their wines was: “the last thing they have to worry about.”
Following a steady increase from 100,000 hectares in 1981 to its peak of 125,000ha in 2007, CIVB figures show a steady decline in Bordeaux’s vineyard area, which had shrunk to 115,100ha by 2009, largely thanks to subsidies.
Emphasising that the challenges faced by Bordeaux are far from unique, Hall pointed to other countries such as New Zealand and Australia as he remarked: “Oversupply is everywhere; it’s something the wine industry needs to deal with.”