A region adored by wine enthusiasts, Burgundy undoubtedly produces some of the finest Pinot Noir and Chardonnay in the world. Nevertheless, vintage after vintage, the prices of the region's wines continue to rise, making their acquisition increasingly difficult for the non-wealthy enthusiast.
So, why are Burgundy wines on average more expensive compared to those from other regions of France? Why is this trend accelerating?
Many factors come into play here.
Supply and demand
Located in the northeast of France, the Burgundy region consists of 30,000 hectares, representing only 4% of the French vineyard. In comparison, the Bordeaux region covers 120,000 hectares (16% of the vineyard) while the Rhône Valley vineyards stretch over 79,000 hectares (10.5% of the vineyard).
This difference in size has a significant impact on the quantities produced. Thus, for 200 million bottles produced each year in Burgundy, 650 million are put on the market for Bordeaux and 465 million for the Rhône Valley.
As you will have understood, and although these figures are very general, the supply is much more limited in Burgundy...and this inevitably impacts the final price of your bottle!
The average size of an estate is also a decisive factor partly explaining certain price differences. Indeed, while the average area of a wine estate in Burgundy is 8.2 hectares, this is 12 hectares in France ! As a result, economies of scale are inevitably lower for a Burgundian winemaker, thus forcing them to better valorize their production.
Moreover, this production scarcity faces an ever-increasing national and international demand.
Indeed, today, nearly one in two bottles of Burgundy is exported. While the historical clients are the United States (21% of exported volumes), England (17%), Belgium (9%), Canada (9%) and Japan (8%), many other countries are now seeking their share of the pie.
If this increase in demand allows Burgundian winemakers to better distribute their sales, it also makes the distribution of volumes more complex each year among all market players, again pushing prices up.
Key figures for Burgundy wine exports
Finally, climatic hazards, although not affecting only Burgundy, also have a clear impact on prices. For example, the terrible 2021 vintage represented half of a usual production for the region. As a result, and in order to compensate for this huge quantitative shortfall, prices saw average increases between 20 and 30%...and strangely, the good 2022 vintage will not bring prices down. Go figure…
The vineyard classification
Another element explaining the high price levels in Burgundy is the great renown of the classification system used in the region.
This system indeed ranks the plots throughout the region, starting at the level of regional appellations, moving through Village AOCs and finally ending with the very precise delimitation of plots (or climats) classified as Premier Cru (10% of the vineyard) and Grand Cru (1% of the vineyard).
Although this system of valorizing the region's finest terroirs has many advantages, this hierarchy nevertheless directs consumers towards the most sought-after 11% of the vineyard and thus puts additional pressure on the prices of the finest cuvées.
For example, the recognition as Premier Cru in 2020 of 200 hectares in the Pouilly-Fuissé AOC saw the prices of wines from these climats increase by a good ten euros from one year to the next simply due to the valorization effect of this production.
The hierarchy pyramid of Burgundy wines
Land prices
If we have seen that supply and demand levels as well as the classification of the Burgundian vineyard are all elements greatly influencing prices, another important factor also explains the rise in prices year after year: land prices.
Buying land in Burgundy has indeed become a considerable investment and the prices of the region's vines are the highest in the world.
For example, in 2019, the average price of a hectare of Burgundy Grand Cru was 6.5 million euros! Also in the same year, a hectare of Chardonnay Premier Cru cost nearly 1.65 million euros while a hectare of Pinot Noir of the same level was worth more than €700,000. Outrageous, isn't it?
It's simple, in ten years, the price of vines has at least doubled, even tripled, and has even increased tenfold for certain plots. A crazy situation that calls into question the traditional model of small family production on which the region was built.
Successions are indeed becoming increasingly complex. In fact, if an estate owns a few ouvrées of a Grand Cru as well as several hectares on a village appellation, the duties to be paid for the former will far exceed those for the rest of the property. Only one solution then often presents itself to the young successor: to part with their most prestigious lands.
Beyond these inheritance matters, and unless you have a very large starting capital, it has also become impossible for young winemakers to set up in the region.
While this price surge particularly affects the Côte-de-Nuits as well as the Côte-de-Beaune, the two most prestigious sub-regions of the vineyard, this situation is now also spreading to less valued lands, thus contributing to a general price increase.
To illustrate the madness of certain transactions here are two examples. In 2014, the Clos des Lambrays, a very famous Burgundian estate with 11 hectares, was bought by Bernard Arnault for the modest sum of 110 million euros...that is 10 million euros per hectare. But that's not the worst! In 2017, its neighbor, the Clos de Tart, sole owner of the eponymous Grand Cru of 7.5 hectares, was sold to François Pinault for a sum close to 250 million euros, or over 33 million per hectare!
Have we reached the limit? No one knows...but this calls into question the historic organization of the entire vineyard. Indeed, in recent decades, many financial structures (banks, insurance companies) as well as several wealthy investors have taken control of the region's finest properties.
Speculation
Besides land prices, speculation has also taken hold of Burgundy wines since the early 2000s. However, it almost exclusively affects the most renowned estates.
Thus, the year 2023 once again broke all auction records in the wine world: 33,000 euros for a bottle of Musigny Grand Cru 2006 from Domaine Leroy, 31,620€ for a bottle of Romanée-Conti 2015 from Domaine de la Romanée-Conti or 26,164€ for a bottle of Criots-Bâtard-Montrachet Grand Cru 2005 from Domaine d'Auvenay !
Unreasonable? It is clear that some ultra-wealthy individuals (notably in China) are willing to do anything to acquire these prestigious bottles.
While some Burgundy owners are not entirely blameless regarding the situation, others are fighting so that their precious bottles are enjoyed by true enthusiasts. Despite this, and out of temptation for profit, some recipients of iconic estates decide to resell their bottles, knowing full well that they can get 4 times, 10 times, 20 times more than their purchase price.
This same speculation has as another consequence to encourage counterfeiting. Indeed, without such sums of money at stake, there would be no fake bottles on the market. A vicious circle indeed.
Winedex Burgundy Index: price evolution of the 40 most expensive wines of the region, taking into account the last 10 vintages for each cuvée: +359% between 2013 and 2023
Burgundy is not the only one
Finally, it is clear that in recent years, prices have increased in all regions of France, not just in Burgundy.
Indeed, while the latter has seen larger increases than average, all winemakers in France, whether from Bordeaux, Loire, Alsace or even Languedoc-Roussillon have faced the same issues.
Thus, due to COVID, the war in Ukraine or various international conflicts, multiple raw materials have soared and many factories have slowed down, leading to shortages. This is especially true for transport (oil) or dry goods (glass, cardboard, labels, etc.) whose prices have skyrocketed.
Conclusion
As you will have understood, supply and demand, the land classification system, land prices, and speculation are the most important parameters to understand the sometimes completely crazy prices in the Burgundy region.
Nevertheless, rest assured, there are still many cuvées that remain accessible in the region for those who know where to look, especially in the southern part of Burgundy (Mercurey, Mâcon, Saint-Véran etc.) or in less renowned northern appellations that nevertheless produce delicious wines, such as Fixin, Marsannay or even the Hautes-Côtes de Beaune and Hautes-Côtes de Nuits.
In any case, whether you are looking for a prestigious bottle or an excellent value for money, do not hesitate to contact
General map of the Burgundy vineyard
