Published on : 21 April 20204 min reading time
Find the right investment in the vineyard with various motivations ranging from pleasure to profitability. And enter into a collective investment.
Why invest in the vineyard?
Investing in the vine
A minimum of one million euros is necessarily required to invest in the vineyard. It is possible to own shares in a winery by joining a collective investment in winegrowing land groups or GFVs.
Advantages of investing in a wine company
You can take advantage of tax benefits, this investment can age and grow over time. Within a wine land grouping company. This management company brings together a fairly limited number of partners who are natural persons. These partners manage wine plots and enter into a kind of scpi to make their investment. And as an investor with a co-owner status in the wine-growing area, he is therefore freed from management problems which are taken care of by professionals. For the exploitation of the products, a winegrower takes care of them in a long-term framework of 18 years or 25 years by a cash payment of the lease. One of the advantages of investing in wine is to be able to operate and invest in an ecological and environmental environment.
How to invest in the winery?
Each partner can take shares in GFV. Normally, unit prices are between 3,000 and 50,000 euros. And investors are advised and subject to the real estate wealth tax or IFI. Especially for GFV shares, partners also benefit from an IFI reduction of up to 75% of the value of their investments. However, this reduction applies to investments up to approximately EUR 101,900, and above this value it becomes 50%. The same case is adopted for investments in the same wine groups through donations or simply the case of successors from the associates. And therefore, if the shares have been financed by debt or not by direct cash payments, the interest can be taken from other land income in the winegrowing group. You can therefore invest in a secure value that will grow over the years and invest for the long term. The GFV uses the win-win contract between the investing partners and the winegrower. So the winegrower avoids all the problems of land costs and a renewable lease contract within a long-term time frame. The winegrower thus has the time to take good care of the production tool and the management of the vineyard by not worrying about the wine land rules. As a result, the partners also benefit each year from the yields in cash or in bottles of wine. A yield that varies from 1.5 to 4.5% depending on the Bacchus conseil company.
The problems of investment in the vineyard
Investing in wine is like investing in any business that is involved in the transformation of a raw product into a finished product such as wine. But currently, the French wine world is experiencing a crisis, even though investing in wine is considered to be investing in red gold. First of all, there are the direct exposures of the vines such as animals or diseases, the animals that force you to put product on your vines and thus decrease the quality of the raw materials at the farm. Or also the diseases that gnaw at the vines, like blue disease or grey rot, and then the partners change techniques that require a lot of investment to eradicate the disease and prevent it from coming back. Then there are climatic effects such as frost: winter, spring and autumn frosts, hail, excess water scalds it with winds and lightning. And finally, the solution to these problems takes time to take shape and will give these problems time to destroy the crops. So solutions are possible, but it is the investment that can delay these solutions.
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