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.
Here’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….
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