Vineyards Spike in Price
Filed in archive French Wines by tammy on March 21, 2007

SUVs -- Hummers, Range rovers
and Ford Explorers -- increasingly ply the roads. They are a potent reminder to consider carefully the economic complexities always swirling beneath Burgundy's idyllic surface when seeking a fuller appreciation and understanding of the region's wines. In this case, worldwide speculation by frenzied individual collectors has caused sharp prices increases. Consequently, the land values of Burgundy's tiny vineyards have soared. Ironically, this has created a mounting crisis at many small domaines where independent vignerons -- grape growers and wine makers -- barely sustain economic feasibility.
France's Napoleonic inheritance laws requiring each child of the domaine owners to receive an equal share in the vineyards have always made it challenging for such vignerons to maintain viable, intact domaines. Even if agreement can be reached over partitioning the tiny vineyard holdings of economically marginal operations, it is increasingly impractical for individual heirs to pay inheritance taxes in the range of 50 percent of currently inflated land values. It is a classic situation of being land-rich, but cash-poor.
Sensing vulnerability, wealthy investors and cash-rich corporations circle like hawks waiting to swoop in and pay top dollar for the prestigious land interests of small domaines.
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Mr Wong
