FRANCE: A Chinese company has acquired a French vineyard in the Bordeaux region and secures a foothold in one of the best wine growing areas

Record ID: 610163

  • Title: FRANCE: A Chinese company has acquired a French vineyard in the Bordeaux region and secures a foothold in one of the best wine growing areas
  • Date: 24th February 2008
  • Summary: VARIOUS OF WINE BARRELS IN CELLAR
  • Embargoed: 10th March 2008 12:00
  • Keywords:
  • Location: France
  • Country: France
  • Topics: Industry
  • Reuters ID: LVA6SM6M0JL0K9SM5YM3WT67LMWX
  • Story Text: Chinese companies start investing in Bordeaux vineyards.
    For the first time, Chinese investors have bought a Bordeaux vineyard, the Latour-Laguens Chateau which makes both red and white wine on 30 hectares of land in Saint Martin du Puy, a small town about 30 minutes away from Bordeaux.
    The Latour-Laguens Chateau produces some 160,000 bottles a year.
    The Bordeaux wine marketing board also said the property deal was good news for them because it means the Chinese are now interested in wine and Bordeaux is their favourite. The man who has run the Latour-Laguens estate for nearly 30 years, Jean-Claude Canu said he had heard rumours that other local winegrowers were also keen to get out of the business and were looking for Chinese potential investors.
    Asked about the local reaction when residents heard about the selling of the estate to a Chinese company, Jean-Claude Canu, said that it was a mixed feeling. But he added that it was good publicity for the Bordeaux wines.

    "It's mixed but what is good is that this is giving some publicity to Bordeaux wines around and maybe some other winegrowers may also try and sell to the Chinese having heard about what happened here," he said.
    The company Longhai International Trading Company Ltd plan to invest hundreds of thousands of euros in the chateau to improve the quality of the wine and turn the chateau into a small hotel.

    "They have plans to renovate the Chateau and to upgrade the distillation facilities and the vineyards and sooner or later they also plan to create a hotel here for Chinese and other clients. The idea is for this to be a sort of Chinese embassy here near Sauveterre de Guyenne (Bordeaux winegrowing region)," said Daniel Carmagnat owner of A2Z property agency.
    Carmagnat, who sold the Chateau, said the Chinese made a good investment because vineyards properties have never been so cheap citing figures of between 18,000 and 20,000 euros per hectare. That is to say, twice less expensive than three years ago when an hectare could reach up to 40,000 euros.

    "In my opinion they (the Chinese company) have done, without any doubt, a very good deal thanks to the quality of the soil here, the location, the name of the Chateau and the environment. Not only there are 30 hectares of vines but also 30 hectares of woodland and meadows. So, it's really a great package overall," he said.
    Thomas Jullien, director of Asia wine sales stressed that even if Chinese invest in wines it is more like a prestige investment than a profitable business.

    "Price of the vineyards are very low. So, a lot of businessmen and big groups are seeing opportunities to invest in vineyards. But compared to other sectors or other investments, these are not very profitable investments because you have to put a lot of effort into making wine. So, we see it much more as a prestige investment. They do it for a showcase," he said.
    The new owners, whose headquarters are in Qingdao, between Beijing and Shanghai, are property developers but also have interests in wine distribution. They are in the process of building a "Wine Palace"
    with a museum dedicated to all aspects of the wine production.
    Chinese imports of Bordeaux wine increase by more than 100 percent each year. The exports of Bordeaux wines to China, mainly the great brands, also represent some 1.8 percent of the total exports.
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