New pricing indicators introduced

The Rhône Valley wine organization, Inter Rhône, has introduced two new pricing indicators for red Côtes-du-Rhône wines that are certified High Environmental Value (HVE) or organic. These indicators are designed to reflect the true cost of producing these wines in a transparent way.

Equilibrium and sustainability prices defined

The "equilibrium price" considers factors such as production costs, yield per hectare, winemaking expenses, inventory levels, and selling prices in retail, wholesale, and export markets. The "sustainability price" includes future investments, marketing efforts, and the transfer of vineyards to ensure long-term viability.

Economic thresholds for viability

According to Inter Rhône, a red Côtes-du-Rhône AOC wine labeled HVE is economically viable at a minimum of 171 euros per hectoliter. However, the equilibrium price for such wines is set at 132 euros, with the sustainability price rising to 171 euros. For organic wines, the figures are 148 euros and 193 euros respectively.

Industry insights and cost breakdowns

Samuel Montgermont, a vice-president of Inter Rhône, said the new pricing tool could help prevent market instability. Damien Gilles, president of the Côtes-du-Rhône syndicate, noted that the calculations consider an operating cost of 6,000 euros per hectare and a yearly remuneration of 18,000 euros for vineyard partners.

Collaborative effort and regulatory context

The indicators were developed over four years with support from the French government, the European Union, and the Bordeaux wine organization. The initiative aligns with Article 172 bis of the Common Organization of Agricultural Markets in Europe (OCM), aimed at managing crises in the agricultural sector.

Hope for broader adoption

Market players in the Rhône Valley are hopeful that other wine regions will adopt similar pricing benchmarks to promote transparency and stability in the industry.