A region adored by wine lovers, the Burgundy product certainly among the most beautiful Pinot black And Chardonnay in the world. Nevertheless, vintage after vintage, the prices of the region's wines continue to increase, making their acquisition each time a little more difficult for the less fortunate amateur.
But then why are Burgundy wines more expensive on average? in comparison to those of other regions of France ? Why is this trend accelerating?
There are many factors at play here.
Supply and demand
Located in the northeast of France, the Burgundy region is made up of 30,000 hectares , representing only 4% of French vineyards . In comparison, the Bordeaux region covers 120,000 hectares (16% of the vineyard) while the vines of the Rhône Valley spread 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 Rhone Valley .
So you will have understood, and although these figures are very general, the offer is much more limited in Burgundy ...and this inevitably has an impact on the final price of your bottle!
There average farm size is also a decisive factor partly explaining certain price differences. Indeed, if the average area of a wine estate in Burgundy is 8.2 hectares , this one is of 12 hectares in France ! For this reason, economies of scale are inevitably lower for a Burgundy winemaker, thus forcing the latter to better promote his production.
In addition, this scarcity of production faces an ever-increasing national and international demand .
Indeed, today, almost one in two bottles of Burgundy is exported . If historical customers are the UNITED STATES (21% of exported volumes), England (17%), the Belgium (9%), the Canada (9%) and the Japan (8%), many others States are now demanding and want their share of the pie.
If this increase in demand allows Burgundy winegrowers to better distribute their sales, it also makes each year the distribution of volumes more complex between all market players, again pushing down prices.
Key figures for Burgundy wine exports
Finally, climatic hazards , although not only affecting Burgundy, also have a clear impact on prices. Thus, the terrible vintage 2021 for example represented half of the usual production for the region. Therefore, and in order To compensate for this enormous quantitative shortfall, prices have increased average increases of between 20 and 30% ...and strangely enough, the good 2022 vintage will not lower prices.Go figure…
The classification of the vineyard
Another element explaining the high price levels in Burgundy is the great notoriety of the classification system used in the region .
The latter in fact prioritizes the plots of the entire region, starting at the level of regional appellations , passing through the AOC Villages to finally end with the delimitation very precise of classified plots (or climates) First Growth (10% of the vineyard) and Grand Cru (1% of the vineyard).
Although this system of promoting the most beautiful regional terroirs has many advantages, This hierarchy nevertheless directs the consumer towards the 11% of the most popular vineyards and therefore puts additional pressure on the prices of the finest vintages. .
For example, there recognition as Premier Cru in 2020 of 200 hectares on the AOC Pouilly-Fuissé will have seen the prices of wines from these climates increase by a good ten euros from one year to the next by simple effect of valorization of this production.
The hierarchy pyramid Burgundy wines
The price of land
If we could see that the levels of supply and demand as well as the classification of the Burgundy vineyard are all elements which greatly influence prices, another important factor also explains the increase in prices year after year: land price .
The purchase of land in Burgundy has in fact 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! 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 grade was worth more than €700,000. Did you say delusional?
It's simple, In ten years, the price of vines has at least doubled, even tripled and has even been multiplied by ten 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 more and more complex. Indeed, if an estate owns a few Grand Cru vineyards as well as several hectares in a village appellation, the fees to pay for these firsts will far exceed those of the rest of the property as a whole. Only one solution then presents itself. often to the young buyer: to part with his most prestigious lands.
Beyond these inheritance matters, and unless you have a very large starting capital, he It has also become impossible for young winegrowers to settle in the region .
If this price surge particularly affects the Night Coast as well as the Côte-de-Beaune , the two most highly rated sub-regions of the vineyard, this situation is now also trickling down to less valued lands, thus contributing to a general increase in prices.
To illustrate the madness of certain transactions Here are two examples. In 2014, the Clos des Lambrays , a very famous Burgundy 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, his neighbor, the Clos de Tart , monopoly owner of the eponymous Grand Cru of 7.5 hectares, was sold to François Pinault for a sum of around 250 million euros , either more than 33 million per hectare !
Have we reached the limit? Nobody knows...but it calls into question the organization history of the entire vineyard. In fact, these latter decades have seen many financial structures (banks, insurance companies) as well as several wealthy investors take control of the most beautiful properties in the region.
Speculation
In addition to the price of land, Speculation has also taken hold of Burgundy wines since the early 2000s. . However, this almost exclusively affects the most renowned areas.
Thus, the year 2023 has once again broken all auction records in the world of wine: 33,000 euros for a bottle of Musigny Grand Cru 2006 of Leroy domain , €31,620 for a bottle of Romanee-Conti 2015 of Romanée-Conti area or €26,164 for a bottle of Criots-Bâtard-Montrachet Grand Cru 2005 of Auvenay estate !
Unreasonable? It is clear that some The ultra-rich (especially in China) are ready to do anything to acquire these prestigious bottles.
If Some Burgundy owners are not exempt from any reproach regarding the situation, others are fighting so that their precious bottles are appreciated by true connoisseurs. Despite this, and by temptation of gain , some beneficiaries of iconic estates decide to resell their bottles, knowing full well that they will be able to get 4 times, 10 times, 20 times more than their purchase price .
This same speculation has for other consequence of promote counterfeiting . Indeed, without such sums of money at stake, there would be no fake bottles on the market. A vicious circle, then.
Winedex Burgundy Index: price evolution of the 40 most expensive wines from the region with socket taking into account the last 10 vintages for each vintage: +359% between 2013 and 2023
Burgundy is not the only one
Finally, it must be noted that in recent years, Prices have increased in all regions of France , and not just in Burgundy.
Indeed, if the latter has experienced increases greater than the average, all the winegrowers of France, whether they are from Bordeaux, Loire , from Alsace or even Languedoc-Roussillon encountered the same problems.
So, because of the COVID , of the war in Ukraine or even of various international conflicts , of multiple raw materials have soared and many factories have been running at low speed, leading to shortages. These include the transportation (oil) or even to dry matter (glass, cardboard, labels, etc.) whose prices have jumped.
Conclusion
So you will have understood, the concepts of supply and demand, the land classification system, land prices and speculation are the most important parameters for understanding the sometimes completely crazy prices in the Burgundy region.
However, rest assured, there are still many vintages still accessible in the region for those who know how to dig, in particular in the southern part of Burgundy ( Mercurey , Mason , Saint-Véran etc.) or on appellations in the northern part which are less renowned and yet produce delicious wines, such as Fixin , Marsannay or even the High Coasts of Beaune and the High Coasts of Nights .
Anyway, whether you are looking for a prestigious bottle or of a excellent value for money , do not hesitate to call on The Illuminated Cellar and to ask for advice!
General map of the Burgundy vineyards
