The word Bordeaux summons images of fabulous châteaus and wines that sell for hundreds, sometimes thousands of dollars. But Bordeaux is also one of the world's largest wine regions, producing an average of 800 million bottles a year. For every first-growth, there are dozens of small farms in appellations most wine drinkers have never heard of.
And over the past two decades, the gap between the price of the region's prestigious vineyards and their less-renowned counterparts has only grown. A new report by the regional Office for Food, Agriculture and Forests looking at changing land prices has found that the five leading Bordeaux appellations account for just 5 percent of the vineyard land in the region of Aquitaine, but represent over 50 percent of its value. Those appellations—Pomerol, Margaux, St.-Julien, St.-Estèphe and Pauillac—exported 10 percent of the wines from the region by volume in 2008 but 50 percent by value.
Since 1991, the value of the area under vine in Pomerol, Margaux, St.-Julien, St.-Estèphe and Pauillac has increased fourfold, to an average price of 800,000 euros per hectare. Set the top five AOCs aside and the average price for a hectare of one of the other 39 appellations is about 34,000 euros, a decrease of 16 percent compared to 1991.
"The market for the leaders is evolving in a very different direction from the rest, as the prestigious appellations are acquired as an investment, rather than for drinking," said the author of the study, Jacky Bonotaux. "For example, a hectare of Pauillac is equal to 12 hectares of Listrac or Moulis [today] compared to 3 hectares some 20 years ago."
A closer look shows that the vineyard prices of some appellations like St.-Emilion, have remained pretty stable over the past 17 years while others, such as Graves or Médoc, have lost a quarter, or even half of their value (though obviously these are appellation averages, not particular parcels). According to Bonotaux, a vineyard of generic Bordeaux was recently sold at an all-time low of 10,000 euros/hectare.
If many vineyards are up for sale, potential buyers are few and far between. "Some sellers are simply taking up retirement, but others are in dire straits and just want out," said real-estate agent Olivier Vizerie. "Many vineyard owners have opted for tenant farmers as a provisional solution as finding clients for properties that aren't viable is extremely difficult."
Bonotaux indicated that the region's vineyard prices have decreased further still since 2008, in line with the dropping bulk-wine prices of some Bordeaux appellations. But he felt they had finally hit the bottom. "Now is the time to invest for companies with long-term objectives."
This is good news for the owners of a horseracing track in Pomerol who plan to put it on the market soon. Although it is unlikely to be sold for the appellation's average price per hectare of 1 million euros, it is still drawing a lot of interest. "The plot represents around 14 hectares, so it is a welcome addition to the Pomerol appellation area, currently limited to 800 hectares," said Jean-Marie Garde, president of the local winegrowers association and owner of Clos René. "We have intervened to make sure it can only be used as farming land."
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