by Sophie Kevany

Prices of prestigious vineyards in France are continuing to rise sharply, while those in less popular regions are falling, and the gap between them is getting larger, said the French national land agency late last week. Average prices per hectare of French vineyards rose by 11% in 2007, on 2006, but certain areas have done better than others, notably, Cognac, up 17.8%, Champagne, up 17.1% and Bordeaux, up 13%, says the latest report from French land agency, Société d’Amenagement Foncier et d’Etablissement Rural (SAFER).

“The prices of land are linked to the price of the wine and demand for it,” said Sophie Elie, an agricultural engineer with SAFER who worked on the report.

“What we see is that good areas are doing even better, while the ones in difficulty continue to have problems, and will have difficulty solving them,” she said.

The area where vineyard prices fell most sharply, by 5.3% on average per hectare, was in south west of France, including Cahors, Monbazillac and Buzet. The report also notes that in Languedoc-Roussillon and Alsace, vineyard values have fallen by 30% over the last four years.

The overall improvement in prices during 2006 and 2007, however, is seen as another positive sign of recovery by the French viticultural sector, after several difficult years since 2003.

The report also noted that the presence of international investors was 'weak', with slightly more activity in vineyards with buildings.