Why is champagne so expensive?

Tasting at Henriet-Bazin 2Fancy making your own champagne ?

Many people who come to our B&B ask if we own vineyards or is the champagne we’re serving, the one we make ourselves…..

Well, no, on both counts, and here’s why…

A hectare of champagne vineyards at the lowest quality (cru) is currently valued at and costs in the region of 1m euros to buy, with a hectare of grand cru vineyards valued at 2m euros, that’s if you could ever find any vineyards to buy.  Vineyards typically change hands between existing champagne producers, by word of mouth, so as foreigners, this would simply not be available to us, even if we wanted that.

There used to be strict rules governing the sale and purchase of vineyards, meaning that the larger champagne houses were not allowed to buy up the smaller vineyards, otherwise there would be a monopoly.  In France, everyone has to have the opportunity to make a living, and so the larger houses and the small producers co-exist happily together, with no-one holding all the power.

I am not so sure any more  that there are official rules about this or that it would even be legal for there to be rules. I think that people try to avoid selling to the big brands if they can for exactly the reasons I’ve mentioned, but money talks and sometimes people will sell for a good deal whoever the buyer is.

new vinesHere’s a new vineyard that’s just been planted in Verzy.  I’ve been following the work going on in this vineyard while out on my daily walk with Pepper, our dog.  These little babies will one day be adult vines, producing beautiful juicy pinot noir grapes to make into champagne, but it won’t happen overnight, which is another reason why we would never want to own any vineyards.

Here’s what happens…..

The little vines will take 5 years to be fully fruit producing adults, worthy of producing good champagne.  During that time all the money is tied up in the investment, with no cashflow whatsoever.  And  then when the vines are fully grown and the grapes worth picking, it will then be another 3 years before the champagne is made and on sale  for you and I to buy.

I make that a total of 8 years investment, with no return, and no guarantee of the end result being good enough to be part of the champagne making process.  Plus, our one hectare will yield around 10,000 bottles and let’s say the selling price is 12 euros a bottles, then your revenue would be around 120,000euros before tax.  So that means it would take almost 10 years to get your money back on your investment in the 1 hectare of average quality vineyard.  Sounds good so far?  But wait there’s more….

adult vinesYou’ll need to spend time and money working the vineyard – the vines don’t just grow on their own – well they do but left to Mother Nature, they won’t produce the result you want in terms of quality.

Then you’ll need to pay the pickers as the harvest is all done by hand. No machines allowed here.

And you’d need to buy a press which you only use a couple for weeks per year ( or pay for someone else to press the grapes, perhaps by joining a co-op)

You’d need to buy vats to ferment and store the wine, acquire cellars to age the wine ( or again  pay someone else to do it for you e.g. join a co-op)

All in all you are probably looking at 20 years or even longer to get your money back!

It’s a risky business, for sure, and I know that if I had 1m euros to invest, I’m not sure I would choose this investment, would you?

And people ask us, why is champagne so expensive??????

To which we reply…. Why is champagne so cheap?

 

Want to learn more about champagne and the people who make it?  Check out our private champagne tours and tastings by CLICKING HERE

 

 

 

4 Responses to “Why is champagne so expensive?”

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  1. yvonnehalling says:

    Hi Ludovic, and great to “meet” you. Come and see us in Verzy! Happy Saturday to you and thank you for your comment :-)

  2. Pasté Ludovic says:

    My Dear Yvonne we probably never met yet but who knows !
    I agree with all your explanations so clear and clever, but at first so real.
    Champagne is NOT expensive if we compare with others french wines.
    I’m a ‘ caviste ‘ nearby Epernay and I had last monday a very attractive day in Duval-Leroy House in Vertus. The cost of investment is so huge including work, patience & passion against risk…!
    I hope we meet once in the future.
    Best regards from a Champagne Lover.
    Ludovic Pasté
    06 08 36 28 82

  3. yvonnehalling says:

    Thanks for your comment ;-) Appreciate you taking the time, Yvonne

  4. Well the case you make for Champagne is indeed the same for all new vines planted. Ok so the cost of land may vary form region to region. Why is Champagne so expensive? The simple answer is we are paying for the fantastic marketing job done by the region. This then would also account for the high cost of land.

    Neat article and glad to see someone taking the time to produce interesting posts.

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