Beaune Viticultural School: Learning Wine Accounting & Land Law

Episode 3 in a series about how future winemakers are trained in Burgundy.

This is the third article of a series. The first, which concerns pruning, can be found here. The second, which concerns wine tasting, is here.

“Négoçiant business is good, but you have to ceaselessly reinvest. The system in France is so poorly done. You can’t move money from one business to another. So you’re obliged to borrow to death on one side, to keep the business going, and on the other side you’re paying full taxes. It’s a metier that becomes more and more complicated - the cat that eats its tail. I’m sick of the system.” - Jean-François Ganevat (Interview, Dec. 2019.)

FEAR OF ACCOUNTANTS

French wine accounting was not the segment of my winemaking degree to which I was most looking forward. In fact, I have an irrational fear of accountants.

It dates back to the first time I unwisely struck out on my own, after quitting the restaurant where I worked in Los Angeles in 2008. The wealthy owner of a different restaurant had offered to pay me the equivalent of my old salary as a consultant. With no idea how to go about receiving money as a consultant, I asked the advice of a friend, who volunteered to put me in touch with his accountant. The problem with this scenario, in retrospect, was this friend happened to be a successful photographer, who trafficked in sums of money that to this day are well beyond my realm of understanding. His accountant presumably received the referral of a dinky time-waster client such as myself in the manner one would accept the gift of a dog turd. Unable to refuse me without being rude to my friend, his accountant proceeded to get rid of me in a diabolically efficient way: by arranging such an absurdly large tax burden on my meagre six months of consultancy income that I was somehow still paying it off to the IRS in instalments some five years later.

It would be years before I worked up the nerve to approach another accountant. My experience with accountants in France has been - well, no worse, but no better. In fact it has been nil. Over the years several friends have put me in touch with accountants, who in turn have unanimously never responded to my emails. I can only assume that if you say you are a writer, accountants run in the other direction. The upswing is that my declared earnings on my writings to date have seemingly been so pitifully small as to attract minimal scrutiny from the authorities concerned. I try to declare income. I have no idea if I’m doing it correctly. My gestures at compliance with the law are met with silence from the law.

The stakes will be somewhat higher if I ever begin producing wine on a commercial scale. I have no desire to, for the moment. But I did my best to take notes and learn the rudiments of French wine accounting during the first week of the Beaune Viticultural School’s instruction in the subjects they group together as “Economy.”

ACRONYM LIABILITY

The first instructor was an endearingly deadpan conventional cooperatrice from the Mâconnais who trailed off her sentences. She taught us the differences between the various wine estate statutes - GAEC, EARL, SCEA - along with their counterparts in the business world - SAS, SA, etc.

As an expat in France, one becomes accustomed to confronting inscrutable acronyms in all aspects of daily life. They arise abruptly in conversation, interrupting the flow of otherwise comprehensible, mellifluous French like regurgitated walnuts.

Perhaps the only nugget of general interest within this lecture was an explanation of the recent trend towards groupement d’employeurs. This is an accounting manoeuvre in which one umbrella company - an SAS or an SA - purchases and markets the wine production of both an estate and its owner’s distinct négoçiant business. This can create confusion on wine labels, rendering it unclear for consumers whether a wine derives from estate fruit or négoçiant fruit, or a blend. (Such is the case, for example, of the wines of Domaine Lapierre and Domaine Foillard and Guy Breton in the Beaujolais.)

What is less well-known is this manoeuvre is not solely intended to obscure a wine’s origins or reduce paperwork. It’s also an insurance issue, allowing the employees of an estate to be legally employed by the umbrella company and its insurance plan, which covers both companies within its purview: the wine estate and the owner’s negoçiant biz. Without this technique, an all-purpose vineyard and cellar worker employed by an estate would not be covered by its insurance if, for example, he or she fell into a vat of négoçiant wine, or choked to death on a business statute acronym.

FINE FINE FINE

Afternoon of the week’s first day was amusing, but for reasons unrelated to the subject at hand. The Mâconnais cooperatrice announced that we would be visiting a Meursault estate for the purposes of posing basic questions about its juridical statute and its vineyard holdings (whether rented, share-cropped, or owned outright). The estate selected for this banal interrogation was Domaine Pierre Morey, a fairly renowned biodynamic estate, making the exercise sort of like interviewing Donna Tartt about her car insurance. (N.B. I am not a fan of Tartt’s writing.) The class stood around and posed questions to Jean-Victor Morey, who gamely responded to a few rounds of tedious questions before inviting us downstairs to taste a few wines.

There was a lot of ho-ho-hoing from the class and the tutor about how this was the real fun of studying in Beaune. This is true to some extent. I was able to confirm that the estate’s wines and barrels are sulfited very regularly. And I learned that the wines undergo several different fining processes before bottling, something I’d never encountered in my visits to natural wine estates.

CANINE AMORTIZATION

On two mornings we learned the basics of wine accounting with a robust wine accountant based in Puligny. Amortization - the spreading of an asset’s cost over its use period - turns out to work in funny and sometimes symbolically-loaded ways when it comes to wine and agriculture. New barrels in Burgundy, for example, are amortized over just 3-5 years, which surely says something about the ideology of new oak within the region. (Good barrels can be used over a much, much longer span of time.) Dogs are amortized over their prospective canine lifespans, under the thinking that they are employed to guard the estate. Dog food is written off.

On a more profound level, vineyards are never amortized, because under the principles of French tax accounting, a good farmer maintains the value of his or her land and does not impoverish the soils. Ha ha ha!

Quarries, on the other hand, are indeed amortized, because what you take out of them cannot be put back in. Chemical agriculture has thus turned the world’s vineyards into the practical equivalents of quarries. Anyone for strip mine wines?

I ceased taking notes at the start of the second morning with the accountant from Puligny, because he was simply reading from an extensive pamphlet, detailing every possible way to declare expenses.

RURAL JUROR

The highlights of the week’s courses were those taught by an intelligent organic Bouzeron vigneron called Xavier Moissenet. It turned out he was a former lawyer, and a friend of one of my classmates, another lawyer in career transition. Among other things, Moissenet taught us the basics of baux ruraux, or rural land leases. Baux ruraux, sonically, is one of the goofiest phrases in the French language, in which the speaker emits the word baux, only to reingest it afterwards with a lot of back-palate Rs. It’s English equivalent is surely 30 Rock’s infamous film-within-a-show The Rural Juror.

Moissenet opened his lesson on baux ruraux with a factoid I’ll never forget. France’s rural land law dates to 1943. Back then, eighty percent of French vineyard land was operated by its owners, with the rest being operated by sharecroppers or renters. Today, the proportion is reversed: roughly eighty-percent of vineyard land is owned remotely and operated by sharecroppers or renters. That’s the latter half of the 20th century for you.

If, throughout this societal shift, French viticulture has retained its small-scale identity, it’s partly due to the land laws, which are elaborately protective of agricultural renters. As they should be. Agricultural leases are something to behold in terms of commitment. Standard fermages (rentals) are generally nine years, which is longer than the national average of marriage duration in the USA (8.2 years). At Beaune Viti I learned of the existence of the bail de carrière, which is a rental intended to last the remainder of a farmer’s career until retirement, a minimum of twenty-five years.

As a typical American capitalist raised to pursue ownership at all costs, it’s hard for me to comprehend such an arrangement, by which a signatory basically says, I’ll never own this land, but I’ll devote my life to it.

Has the farmer, in devoting his or her life to a swathe of land, owned it already, in a spiritual sense? How important is it for a farmer, at the close of his or her career, to legally own the land he or she is no longer physically capable of farming? In a society that - at least in theory - provides for its retirees, is land ownership quite as necessary? When we talk about such time spans, ownership itself becomes a flimsy idea. You start to sense, embedded at the limits of perceptibility in French rural land law, certain ageless paysan precepts about the transitory nature of life on earth.

SIGNIFYING NOTHING

My attention tended to wander throughout this week’s lessons. In certain instances, I had the impression that the accountants teaching the courses were taking the opportunity to demonstrate to their future clients the fundamental importance of their services. Justifying their fees, as it were. They were sketching for us the outlines of what we would, in the future, be legally obliged to pay them to allow us to avoid.

I wasn’t the most bored student in the class. No less than three of my fellow students were actual financial analysts or accountants, for whom the lessons were remedial blather.

One summed it up thusly: “They’re doing their best. But if you know nothing about accounting before these lessons, you’re still going to know nothing about accounting afterwards.”

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Coming soon: Learning Viticulture

Beaune Viticultural School, pt. I: Learning to Prune
Beaune Viticultural School, pt. II: Learning to Taste Wine