- by Decanter
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Jefford on Monday: Young, Energetic and Needy
Pic: David Clark spraying on his tractor © David Clark
(If you read French, these organisations have, unusually for France, a coherent and well-organised website at safer.fr.)
They’ve been in the news recently regarding the controversial sale of Clos des Lambrays to LVMH: 8.66 ha of prime Grand Cru land, sold for a stonking wodge (north of 33 million euros, though the exact price hasn’t been made public). Wasn’t this precisely the sort of sale SAFERs were designed to prevent? Rich outsiders, waddling in and slurping up the local cream?
A bit of background first. A SAFER (Société d’Aménagement Foncier et d’Établissement Rurale, a name I challenge anyone to translate into English succinctly) is a not-for-profit company with a quadruple government mission: to keep agriculture and forestry active and viable; to help youngsters get going in rural settings; to protect the environment and natural resources; and to enable local rural economies to flourish. France has 26 of them (three in its overseas territories); they came into being in 1960, at a time when rural depopulation was beginning to be problematic, as it still is.
Its most eye-catching tool is the fearsome droit de preemption (preemptive purchasing right). All of France’s notaires (solicitors or attorneys) must inform the local SAFER about land transactions. If the SAFER considers that the sale doesn’t meet any of its aims, it has the right to buy the land in place of the would-be purchaser, and then sell it on to someone else. I realise that this will seem shocking to delicately liberal British, American and Australian sensibilities – but the French accept forceful intervention from above in order to achieve government aims. SAFERs will also handle a land sale on a vendor’s behalf if wished.
In truth, the droit de preemption isn’t widely used. There were 1,360 of them in 2012, but that covered just 0.7% of all the land transactions in France in that year. They also represented only 14% of the land sales overseen by SAFERs (and only 5% of the value of those transactions).
I talked to recently-retired winegrower David Clark, formerly of Morey-St Denis, and he gave me a practical example of how he (despite, note, being a Scotsman and therefore ‘an outsider’) benefited from the SAFER’s approach. He quickly realised that owning decent land was everything in Burgundy, and he was young. But as an outsider, he never got first pick or even first sniff of anything.
When a SAFER sells land, it puts an ad in the paper and names the price – and that’s it. You can offer three times the price but it won’t help. The SAFER simply chooses the most suitable candidate among those prepared to pay the named price.
Amazingly enough, the local SAFER came to handle (in 2008) an ultra-rare sale of some Vosne Premier Cru Les Gaudichots. This is a tiny and fragmented Premier Cru, but one of extraordinary lustrousness, since most of it was incorporated into La Tâche in the 1930s. (For an admirable account of the history of this vineyard, see Steen Öhman’s coverage. The parcel came with a bit of Echézeaux. This was an ordinary sale on behalf of an elderly owner, not a pre-emptive purchase. Some 48 applications for the land were received, including that of the modest but hopeful Mr Clark. The SAFER mooted.
In the end, the Gaudichots went to Régis Forey, making the existing 0.1 ha morsel he owned a little more realistic, at 0.3 ha (the two plots were contiguous). Clark missed out on the Echézeaux, too. The SAFER did, though, ask Forey to sell an equivalent area of Vosne village land; perhaps they felt uncomfortable that the prized plot had been given to an established 7-ha domaine.
There were 18 candidates for the village land, and Clark got it. He was young, energetic and needy – hence deserving. (His domaine, by the way, has now been sold to another young, energetic and needy couple, Yann et Justine Charlopin-Tissier. For more conversation with Clark, including the reason why he sold up, see my column in the August edition of Decanter magazine.)
As a brief footnote to that story, the canny will have noted that the vendor of the Gaudichots will have received less -- much less -- than the market value for her plot. Indeed; it was certainly not in her best financial interest to sell it in that way.
Yet other Gaudichot owners (like the, um, needy DRC) will have benefited. Conservative SAFER valuations, I understand, are used as a basis for the calculation of death duties or estate tax – the dreaded droits de succession – in France. The high level of these taxes rips land out of family ownership in France’s most prestigious vineyard areas. Any way of dampening them is to smaller growers’ benefit, so the SAFER could be said to be acting in best local interest in adopting conservative valuations.
And the LVMH sale? No one can deny that Burgundy’s economy is prospering or that viticulture there is eminently viable, and I’m sure that LVMH does its bit for the environment. But I can’t quite see how this sale will help Burgundian youngsters get going. Perhaps it should have been pre-empted by the SAFER, and the Grand Cru divided into four and sold on to the young, energetic and needy. How, though, could the needy have raised the colossal sums required? You see the problem.
In all likelihood, too, Clos des Lambrays was no longer technically owned by individuals but by a holding company. In that case, the SAFER is locked out of the deal as the owner of the land has not changed; the holding company simply has a new set of shareholders. Money will always win in the end.