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Wine estate acquisition: the keys to success

Show detail - Real estate agency Biarritz - Luxury houses and apartments Basque Country

As a major player in high-end real estate, Barnes is offering its expertise in wine mergers and acquisitions with Barnes Vineyards Investments.

In a global and tailor-made approach, Barnes specialists tailor each project to the specificities of the domain and to the vision of the buyer. Delicate work including audits, logistical and commercial expertise, valuation of the property and personalized support. Any transaction requires the prior validation of some essential elements.

I - Review of vineyards and land

An in-depth analysis of the vineyard is the cornerstone of the project.

Starting with a verification of the density of the plantations of the grape varieties concerned (encépagement) and the conformity of the vineyard register of the domain, certified by the Customs.

A metric control of planted areas is essential, as is an examination of the health status of the vineyard since all vineyards have diseases and counting missing.

Concerning the land, one distinguishes the lands and the woods.

Agricultural land is subject to production authorizations via the CAP which must be verified.

Natural areas and woods are also listed in the Local Urban Plan (PLU) and may, for example, be ineligible for wine use.

Finally, it is necessary to examine the climate risk map in order to anticipate any weather and weather variations that are detrimental to the vineyard.

II - State of the buildings

In the long list of mandatory controls before the transfer of all buildings are:

  • The "asbestos" diagnosis (at the expense of the transferor) carried out on the entire building
  • Expertise "Termites and xylophages" of all built land 
  • A drinking water report provided by an accredited laboratory
  • A state of risks of exposure to lead if the buildings are prior to 1948 and the area located in an area defined by a prefectural decree 
  • The Energy Performance Certificate (EPD) dating back less than 10 years 
  • A certificate of conformity of the septic tank issued by the Public 
  • Non-Collective Sanitation Service (SPANC)

Before the acquisition of a vineyard, it is recommended or even necessary to control other elements:

  • The Local Urban Plan and the building permit if applicable Large works, the ten-year warranty Damage-Works and the conformity of constructions
  • The reliability of the main structures 
  • Risks related to natural disasters, validated by a study dating back less than 6 months 

It is prudent to study local development prospects such as urbanization, the deployment of roads or the installation of environmental devices (wind turbines, etc.). Territorial and local governments will provide valuable information on the proposed works.

III - Conformity of winemaking facilities

This is one of the complex points of such an acquisition that requires specific support. The complete list would be too technical but the main controls concern:

  • Electrical installations 
  • Effluent treatment 
  • Contamination risks (chlorophenols and chloroanisoles) 
  • Respect of technical standards specific to the appellation and environmental standards 
  • The conditions of safety at work

IV - Stocks and advances on crops

Valuation and inventory control are operations to be carried out with care.

Quantitative and qualitative statements of bulk and bottled stocks will be produced. An analysis report will be issued for each vintage, completed with contradictory tastings.

Stocks of dry matter and phytosanitary products are also recorded.

The owner of a vineyard incurs costs to carry out the production and marketing of the next harvest that will benefit the buyer. The amount of these expenses called advances on crops (or advances to crops) thus completes the value of stocks.

V - Production equipment

The buyer of a winery must ensure that the materials comply with environmental standards, cultivation techniques and working conditions.

It is advisable to list precisely the state of all the materials and to check if they belong to a Cooperative of Use of Agricultural Equipment (CUMA) or a pledge. These controls are essential for a fair assessment of the amount of equipment included in the sale.

VI - Cooperative, tenant and staff

When a purchaser does not wish to continue to entrust the production to a cellar cooperative, it will denounce this practice in writing before the actual transfer of the estate. Otherwise, the new owner may be required to pay penalties.

A buyer rarely accepts the resumption of a domain operated in renting. The owner who wishes to yield will most often have to study with the farmer the conditions for a termination of the lease.

On the other hand, unless specifically agreed, the acquisition of a vineyard includes the continuation of contractual commitments with the staff. It will be necessary to verify the employment contracts and to establish a decree of situation for balance of any account before validating the transfer.

VII - Valorisation of the brand and the fund

The overall value of a winery is also based on parameters that are difficult to estimate, particularly the value of the fund.

The reliability and profitability of the business often lie with the winemaker himself. The preservation of the existing clientele is difficult to guarantee whereas it is for the seller a constituent element of the value of the fund.

The purchaser will also have to check if the domain mark (s) and their website are protected by a registration at the INPI and under what specific conditions, especially if it wishes to export.

VIII - Estimate the capital gains

Finalizing the transfer of a wine property also involves the seller estimating the amount of any capital gains to be settled, whether classified as private or professional. This complex aspect justifies the intervention of its legal and accounting partners before concretizing the sale.

Acquiring or selling a wine estate requires a wide range of knowledge and expertise.

To secure such an investment, Barnes Vineyards Investments enlighten you on the best opportunities, the potential of the property and accompany you well after the sale.

We combine legal expertise, commercial, tax, logistics and know-how specific to the terroir and winemaking for one purpose: optimize the profitability of wine investment projects entrusted to us, in accordance with the wishes of the purchaser.