Why does one wine cost €2.50 or €5 ex-cellar, from the producer, while another is €3.50 or €10?
The answer, all too often, is either that the figure was set using ‘cost-plus’ pricing – adding a margin to everything that has gone into producing and packaging the liquid – or based loosely on the ‘going rate’ – what the neighbours charge, which more than likely involved a ‘cost-plus’ calculation.
This basic economic model is widely applied in agriculture and, historically, has worked relatively well, despite occasional years when bad weather affects the quality and/or volume of production.
The 2025 yields will be very similar to 2024
But, as data gathered by the Bordeaux-based producer (Château Bauduc), and analyst, Gavin Quinney, reveal, climate change and more specifically a shortage of water, have run a thick editorial pencil through ‘occasionally’. During the five-year period ending 20 years ago, Bordeaux producers averaged 50 hectolitres per hectare. Today the figure is 37hl/ha, a fall of 26%. Now, setting aside the 50-100 or so Crus Classés that successfully sell their wine en primeur at – in some cases – eye-watering – prices, most of Bordeaux’s 4,600 surviving estates were not growing rich on the yields they were getting two decades ago. Over that period, however, French inflation has increased their costs by 38%.
Falling revenues
In 2005, basic Bordeaux and Bordeaux Superieur – the mass of what the region produces - sold in bulk for around €700 per 900-litre tonneau – a price that had barely risen over the previous decade. In August last year, as Vitisphère reported, the average price had crawled up to €917, nowhere near the €1,447 the Chambre d’Agriculture de Bordeaux estimated a conventionally-farmed 40ha estate with 3,300 vines per hectare and yields of 50hl/ha, would have needed.
