Administrator tries to sell off Pressoirs de France assets

It now looks certain that the Pressoirs de France Champagne négociant business based in Faverolles-et-Coëmy to the west of Reims will be broken up and the main asset, the vineyards, sold off to the highest bidder. Having failed to sell the business as a going concern, the l’administrateur judiciaire (administrator) Jean-Luc Mercier, appointed by the French courts on 8 January (see 14 January 2013), has launched a tender calling for bids for the company’s two main sellable assets.

He has listed these as the vineyards it owns, some 10.67 hectares of vines which have an estimated value of somewhere between €11 and €15m, plus the 165 hectares of supply contracts the company has, which include 84 hectares where the contract has a further four years to run.

While vineyard land in Champagne certainly regularly fetches in excess of €1m per hectare, there is some debate about the value of the supply contracts however. With growers paid in four tranches for their grapes, the second payment for the 2012 crop is due today 5th March and Jean-Luc Mercier the administrator has warned suppliers that this payment mounting to €2.5m will not be met by the deadline. In the wake of past scandals like the Bricout affair contracts are now more carefully drafted and may well be nullified if payment is not made on time, making them worthless to any potential buyer.

Despite these developments, owner of the Pressoirs de France group Nicolas Dubois still says he is optimistic about rescuing the business, which may further deter buyers interested in the supply contracts. The vineyards should certainly attract interest from the most profitable groups in Champagne like LVMH which has been actively buying up land under vine. While others like Pernod-Ricard can afford it, boss Michel Letter is on record as saying : “We prefer to build strong relationships with growers and find extra supplies that way there is no need to buy.”

Interview: Michel Letter, DG of G.H. Mumm & Perrier-Jouët at Pernod Ricard

The Drinks Business February 2013:

An outside opinion: Michel Letter was critical of the Champenois when he arrived in the region back in 2006 saying they didn’t always seem to apply logic to the decision making process. Seven years on and he has been accepted by the Champenois as one of their own but his different background has enabled him to bring a new approach to the region and how the houses of GH Mumm and Perrier-Jouët are run.

Read the full interview here.