Iconic French land like Saint Emilion will likely retain its status in light of a new EU regulation, since it is famous for producing high-quality wine. Photo Credit: Flickr CC user Megan Eaves
Change doesn’t come easily to French wine culture, as we have seen with wine enthusiasts lamenting the sale of wine land to foreign buyers in Bordeaux. The country’s reputation for fine wine has given it an esteemed reputation, and any minor change can elicit worry among its winemakers. The EU recently passed a regulation that took effect as of January 1, 2016, removing the strict laws against selling wine grown on unregulated vineyards. In the past, a French winemakers couldn’t grow wine in Paris and sell it on the market; he could only make the wine for his personal use. Any budding winemaker who wanted to make it big in France had to buy up old vineyards and revamp them. Today, this new law has opened the field up to new growers, allowing them to choose nearly any land they want to build their own vineyards. Although the law specifies that France can only grow an additional 8,000 hectares annually, it will have an immense impact on French wine culture over the next decade.
Benefactors of Change: Old Vineyard Buyers
The new EU wine regulation is a win for any new vineyard buyers who are getting into the wine game for the first time, or even established producers looking to expand their terroirs beyond what’s already available on the market. As wine land expands into unregulated territory, the overall vineyard prices will decrease in AOC-regulated areas. Many regions in France, such as Bordeaux, have seen huge price hikes on vineyards in recent years, limiting the number of buyers who can afford to invest in the land. Available wine land is notoriously scarce in France, especially after Chinese collectors began investing heavily in Bordeaux and Burgundy. Making wine in these iconic regions meant that winemakers could often sell their bottles for double, sometimes even triple, the market price in China upon release, simply because the “Bordeaux” name was associated with the wine. Demand for vineyards went up, as did prices.
Although it is logical to assume that higher prices of admission into French winemaking have led to better quality wine (only the best winemakers will invest in such expensive real estate), there is little evidence to support this theory. In fact, exorbitant vineyard prices have already taken a toll on French monopoles, and are starting to impact inheritance land. Wine families who have grown grapes for decades are sometimes unable to afford the steep cost of maintaining their land in the family name, and find it easier to sell to foreign investors or winemakers with expendable income. With this new EU wine regulation, land outside of established, and popular, terroirs will be far less expensive than land currently being sold in Burgundy, Bordeaux, and Champagne. In time, opening more land up for commercial vineyards might bring down the average vineyard selling price in established regions as well.
French wine experts believe that most of the major vineyard sales will take place in areas just outside of Champagne and Burgundy. It’s possible that the “feeding frenzy” that will happen in these new, unregulated regions will take some of the pressure off vineyard sales happening within established terroirs. In other words, iconic French wine terroirs will be of less interest to investors looking to buy cheap, putting old vineyards in the hands of winemakers more dedicated to the terroir and its traditions. Not only will this law mean a greater diversity of French wine for collectors, it might also lead to better wine in established terroirs. In addition, collectors on a budget will be able to invest in wines grown in terroir very similar to that of established regions, but at a drastically different price point. In the coming years, collectors might invest in sparkling wine grown just outside of Champagne’s border, but at a far lower price.
Champagne’s Excitement and Fears
Not all of the buzz around this new law is positive; Champagne growers fear that this regulation will spell the end of the region’s reign on quality sparkling wine. While collectors get the chance to invest in potentially high-quality wine grown right next door, Champagne winemakers could see a decrease in market worth as more collectors invest in outside regions. It’s true that greater competition could negatively impact Champagne’s sales, especially considering that this region has a monopoly on top-quality sparkling wine. While producers like Krug have always emphasized wine quality above all else, the increasing interest in grower Champagne proves that big-name Champagne estates have never been completely immune from competition. However, increased competition could also force Champagne’s less-than-perfect estates to up their game on the wine market.
Champagne has the most to fear from this new law, since it has a more specific niche market than Bordeaux or Burgundy (which are known for both their red blends and their white varietals). The border lines, strict regulations, and quality reputation of Champagne has allowed it to thrive even when competition around the world was stiff. Now, anyone can buy up land near Champagne for a much lower cost than within the region. Vertus mayor Pascal Perrot tells BBC, “This rule spells the death of the Appellation d’Origine Controlee system, which we have had since 1927. There will no longer be any criteria for planting. Terroir, the quality of the earth, exposure to the sun — they will count for nothing.” Perrot has a point about the Controlee system, but it is possible that once new producers come into the fold, AOC regulations will take hold in these new regions. In addition, about a quarter of all wine already made in France is unregulated, meaning that unregulation does not necessarily mean either the death of AOC or of quality.
Amateur Growers Are a Risk, But Not to Established Regions
Pomerol winemaker Jean Baptiste Bourotte explains, “It’s still important to ensure that vines will not be planted in unsuitable areas, and to protect the quality image of French wine.” Established French regions already have a significant head start on any new estates that will crop up in unregulated territory now that the law has gone into effect. That’s why few experts are worried about the impact that this growth will have on established French estates in other regions. Winemakers working in these unregulated regions have to work harder to establish themselves on the market than winemakers producing wine in iconic French vineyards. Many estates in Bordeaux and Burgundy already receive ample praise and attention from wine critics, and have the funds needed to make the highest quality wine possible, as well as ready-made connections to importers who compete for their business.
New winemakers taking advantage of the new EU wine regulation change are unlikely to surpass classic houses like Moët & Chandon in sales for the first few years of cultivation, or even decades from now. For collectors, new, unregulated regions will produce wine of varying quality until the best producers begin to stand out among the crowd. Collectors will gradually see patterns emerge in new regions of France, making it easy to see which wines are worth collecting. It’s best for collectors to hold off on seriously investing in any new French wines grown from unregulated land until the new estates settle in.
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