Why Burgundy Prices Are Shooting Way Up
Following onslaught of environmental calamities, winemakers warn that a Burgundy "apocalypse" is coming.
The wines of the Burgundy region of France have long been considered some of the best in the world by collectors and casual sippers alike. But after an onslaught of environmental calamities, winemakers warn that a Burgundy "apocalypse" is coming, Elin McCoy writes at Bloomberg Pursuits.
Burgundy buyers have likely noticed prices rising steeply since 2010, when a series of hailstorms and floods began decimating a area vineyards. The Côte de Beaune, home to many of the most famous vineyards in the world, has been hit hard.
Now, as grape crop yields have hit new lows, winemakers are forced to raise prices higher and higher in order to survive. In 2014 alone, some vineyards lost 90 percent of their crop, and the outlook for 2016 is looking even worse. In April, the worst frost since 1981 hit Burgundy, potentially reducing the harvest by 40 percent. According to David Croix of the winery Domaine des Croix, the cost to grow his grapes has doubled since 2011, but the prices of his bottles have only risen 15 percent. For many growers, including Croix, this has meant flat-lined or even negative profits.
"Imagine that over six years, you have the equivalent of no of no income for three [vines], yet have the same costs," says Alex Gambal of Maison Alex Gambal, who has, like many Burgundy winemakers, struggled with the financial burden the elements have put on his vineyard.
Blair Pethel, who owns Domaine Dublère—a small domaine that buys grapes from growers to turn into wine, rather than growing their own—says a Burgundy "apocalypse" could be coming, during which a number of producers and growers have to shut down or dramatically raise prices just to stay afloat. Already, Pethel has seen the price tags of Brugundy grapes rise considerably to account for the limited harvest. In 2009, the cost for the fruit to produce is 300 bottles of Charmes-Chambertin $8,800. In 2015, that cost rose to nearly $25,000.
Despite the difficulties facing Burgundy wineries, the demand for the region's wines is higher than ever, as many Bordeaux collectors have embraced Burgundies as an even rarer breed of vino. Demand is so high, and product so low, that many producers aren't even sure what to charge for their wines any more. But one thing is certain: prices are up—way up. Soon enough, casual connoisseurs might be turning to other regions to get their fix, as Burgundy becomes even less accessible to drinkers outside the one percent.