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THE ART OF INVESTING IN VINEYARDS – Don’t Miss the Opportunity to Invest in Vineyards in 2024!
11 March 2024
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11 March 2024
English translation by Nathalie Parent Dumoulin, NEXT Edition
The year 2024 is expected to be crucial for estate investments. Among asset diversification options, the French wine industry still holds undeniable appeal for lovers of terroir. Even though the economic climate is challenging and the market is prone to deep, tense crises, some investments show eminent potential.
Investing in a vineyard is not just a financial decision but a choice driven by passion and culture. Wine-growing land and wine are more than mere commodities; they represent a rich gastronomic and cultural heritage deeply rooted in French history. Therefore, this type of investment is suitable primarily for those who are enthusiastic about wine and want to blend pleasure with performance.
Even for seasoned investors, investing in a wine estate is challenging. It demands extensive knowledge about the estate and a daily commitment to entrepreneurial responsibility.
For investors who want to commit themselves only partially, leasing a few quality plots to a vineyard operator is a viable option. It requires less personal commitment while still offering the potential for profitability. It is also ideal for diversifying an investment portfolio without involvement in day-to-day functions.
Nowadays, investing in the wine industry can be a formidable task due to the limited availability of quality land. The scarcity of such land has caused a significant increase in the value of vineyards that meet the required standards. By 2024, the distinction between PDO and non-PDO land will be paramount. Land prices depend heavily on the quality of the terroir, which makes it essential to seek professional guidance and expertise when acquiring vineyard land.
Investing in vineyards can be an alluring prospect due to the potential for capital gains. France’s winegrowing heritage is generally considered a safe investment over the long run, as its value hardly ever drops. Vineyards can also provide tax and asset-related benefits. However, it is vital to recognize the inherent risks involved in this activity, such as unpredictable weather conditions or market instability. Investment performance can vary, and there is no guarantee of returns, so a well-informed approach is necessary.
Several schemes can offer solutions to those wishing to invest in the wine land market. One such scheme is the Dutreil Agreement, also known as Pacte Dutreil in French. This tax-smart strategy aims to facilitate the transfer of family businesses and offers exemptions under certain conditions. Contribution to a holding company is an often-overlooked scheme with great potential. It gives entrepreneurs and investors an intelligent way to optimize the capital gain on selling company shares. Investing in vineyard investment funds is another scheme that offers attractive tax benefits, including partial exemption from the French wealth tax (IFI) and capital gain allowances on transfer or sale. Using these schemes makes it possible to invest in vineyards without incurring a significant tax burden, allowing investors to take full advantage of the benefits of these intelligent investments.
If you want to diversify your portfolio, consider investing in vineyards in 2024. This promising asset option can help you achieve your financial goals.
However, wine investment management is an intricate art that requires expertise. Investors must understand the wine market well and combine it with their financial knowledge to make profitable investments. Edward Lawton is committed to identifying exceptional vineyard assets that offer the best opportunity for pleasure and profitable investments.
Vineyard investment also involves assessing the quality of the terroir and identifying appropriate grape varieties. Similarly, production management and wine quality assessment are crucial to maximize returns on investment. Frédéric Massie, an expert from WI&NE Nouvelle-Aquitaine and DERENONCOURT CONSULTANTS, is often appointed to guide investors on technical, environmental, and commercial vineyards-related matters. With his expertise and sensitivity, he will help assert a vineyard’s identity and enhance the unique value of its wines.
In a collaborative state of mind, David Lawton founded WI&NE, an association of wine experts, to provide investors with the best possible support at every stage of a vineyard’s life, from one vintage to the next. WI&NE serves as a toolbox for investors, drawing on the know-how of its members. “In short, if you choose to invest in vineyards, it’s crucial to approach this investment professionally and prepare to get the most out of it. You should know how to express your terroir, from land to glass, in a comprehensive approach that prioritizes quality and customer satisfaction.” David Lawton, LAWTON TRANSACTIONS https://lawton-transactions.com
This article was written and translated FR>EN by Nathalie Parent Dumoulin, founder of NEXT Edition and a WI&NE Nouvelle-Aquitaine member.
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