|To oak or not to oak? The decision could double the production costs.|
However for the top Cru Classe estates in the Medoc, Pomerol, Graves and Saint Emilion the production costs will be slightly more than €2.88. If new oak barrels are used for ageing the wine there is an immediate extra €3 per bottle. There may be additional capital expenditure such as an optical sorting machine. These amazing innovative machines can cost approximately €150,000 for a Bucher Vaslin or X-Tri machine. But these machines reduce the labour costs of sorting grapes, as 6 or 8 people were previously employed over two or three weeks. The current minimum agricultural wage in France is €9.76 per hour. So the cost for employing 8 people over three weeks would be approximately €10,000. The optical sorting machines also process the grapes extremely quickly and precisely.
Of course there is capital expenditure required in any winery, such as replacing fermentation tanks and up grading pumps and cooling equipment. But these costs can be off set over a large wine estate that might be producing over 500,000 bottles per year.
And finally the cost of the bottle (most top Chateaux use a heavier or engraved bottle) as well as the cork (a longer cork is best), and the label.
Some Chateaux are now investing in ambassadors and marketing people in order to support their brand, but the main sales are still controlled by the wine merchants (negociants) in Bordeaux. So there are minimal costs for sales and distribution.
So the approximate cost for producing a bottle of top quality wine in Bordeaux:
€2.88 basic cost (based on volumes above)
€3.00 if using new oak barrels
€2.00 for extra winery costs
€1.00 for extra marketing
Of course these figures can vary tremendously depending on the scale of the estate. As an example Chateau Clinet in Pomerol produces +-48,000 bottles per year, whilst Chateau Lascombes in Margaux produces well over 500,000 bottles per year. So the relative costs may be much lower for a larger estate. But if these wines are sold over €50 per bottle (the wholesale/trade price), then there is a decent margin involved, and sufficient financial cover to see the estate through some difficult years.
|How much did it cost to produce each bottle of these exquisite wines?|
If you are producing Bordeaux AOC wine at €2.88 and you are struggling to survive with minimal margins and slow sales, then you are hit by a drop in production, it will hurt. This is 55% of Bordeaux production.
The irony of 2017 is that most of the top estates on better terroir have not been effected by the frosts, whilst the majority of other estates on the lower vineyard area in Saint Emilion, parts of the Entre Deux Mer in Moulis and Listrac and in the wider Graves area have been hit hardest. This is the volume of Bordeaux production.
|It is cheaper to produce dry white wine or rose wine in Bordeaux and the ROI is quicker.|
|It is more expensive and more risky to produce sweet wines in Bordeaux.|
|Sauternes sweet wines should be more expensive than the red wines.|