When thinking about France, many associate the country with its fantastic wine-producing vineyards. A very large number of grape varieties are cultivated in France. Purchasing a vineyard in France can offer a great lifestyle and a viable business.
This sector is therefore extremely sought after, especially since there have been significant changes made by the last agricultural law passed in France on 14th October 2014.
The French legal system is highly protective of its agriculture and in particular, is focused on preserving the quality of the soil by restricting the size of each farm (ideal size of a vineyard is approximately 20 hectares, producing around 130,000 bottles per year) and ensuring priority is given to qualified farmers or Vintners.
Vineyard transactions can be complex for many reasons. For example, if the organisation of the site is not straightforward, where more than one company is involved – perhaps one owns the property and another manages and runs the vineyard. Or it may be to do with a particularly complex purchase of shares or assets.
Purchase of land of this type is subject to the control of French land agencies, who typically are agricultural bodies who have a right to first refusal on most rural properties that come onto the market. These properties are also subject to national regulations that monitor farming structures.
When considering your vineyard purchase, you need to carefully select which area in which you would like to establish yourself and this will determine the type of wine that you produce. For example:
- Alsace in the north-east of France and renowned for producing high quality white wines.
- Bordeaux is one of the most famous names in the wine trade and has been for centuries. Bordeaux produces more classed wine than any other region in France.
- Burgundy produces Chardonnay and Pinot Noir. At the southern end of the region is the area of Beaujolais, which is known for its Gamay-based wines.
- Champagne is where that sparkling wine which only when produced in line with very specific and strict practices can be called ‘Champagne’.
- Languedoc-Roussillon is where a great number of varietal wines are produced, as well as the increasingly popular rosé.
Once the area is established, there are many other considerations.
For example: you need to consider how the business is set up. Is it part of an asset deal, whereby the farmer acquires assets assigned to the wine farm, but the running of the vineyard is continued under a different legal entity? The buyer would then need to create a new legal entity or use an existing one for completing the transaction. One advantage here would be that the buyer is exposed to smaller risk.
Or you may consider a share deal. As part of a share deal, the buyer (investor or farmer) purchases the share and equity stakes of the company that owns the assets necessary to run and operate the vineyard and trade of all its products.
Whatever deal works for you, vineyards hold their value well – even if the winemaking isn’t a success the land and property will increase.
For expert advice on buying and selling a vineyard in France, please contact our legal specialists at Delcade on +33(0)1 75 43 18 56 or email: firstname.lastname@example.org