Amid wine boom, Chinese buy up Bordeaux chateaux
Bordeaux, France (AFP) March 2, 2011
China gained another foothold in the booming wine trade with Bordeaux when a Chinese jewellery magnate added a chateau in the south west of France to his glittering assets.
Richard Shen Dongjun's decision to buy Chateau Laulan Ducos is part of a broader Chinese investment boom that has begun to change trading strategies -- and even the taste of some wines -- in France's best known growing area.
The 42-year-old CEO of Tesiro, a high-end retail jewellery chain, visited 40 vineyards before settling on his 22-hectare (54.36 acres) cru bourgeois estate at the remote tip of the Medoc region outside Bordeaux.
In an interview with AFP, Shen said his family and friends had been astonished by his plan to invest in a French vineyard but, amid a Chinese wine boom offering ballooning profits, "they are beginning to understand."
He began importing wine to China last year, when the combined Chinese-Hong Kong market lapped up 33.5 million bottles of Bordeaux worth 333 million euros (459 million dollars), making it the region's biggest export market by value.
Taken separately, and in value terms, wine sales to China increased 98 percent and those to Hong Kong rose 126 percent in 2010.
Given these figures, it's no surprise that savvy players like Shen are heeding the call that has lured many a foreigner to Bordeaux's quays over the past 800 years.
"I wanted to understand the entire process of producing wine -- not just the commercialisation of wine -- in order to develop the market," said Shen, who plans to invest to improve the quality of his Cabernet-Merlot blend.
This dovetails nicely with Bordeaux's tradition of welcoming foreigners who have developed a passion for its wines and are eager to develop trade, according to Georges Haushalter, president of the Bordeaux wine council.
"First, the English, Dutch, Irish came. The Japanese came 20 years ago. It's logical that the Chinese arrive today," he said.
In the last three years, the Chinese have purchased five chateaux, including one snapped up by the state-owned conglomerate COFCO last month.
But the Chinese buyers have put a savvy twist on tradition. Not only will they control the entire production from grape to glass, cutting out the middlemen, but every sip is destined for China.
Shen confirmed that all 150,000 bottles of Laulan Ducos will be given a packaging makeover suited to Chinese consumers and bypass the traditional network of brokers and merchants that distribute Bordeaux.
"There are loads of examples of foreigners coming to Bordeaux and investing in chateaux and export businesses, but they've almost always adopted the Bordeaux model of exporting to multiple markets," said Francis Anson.
"Very few take the entire production for their home market," the English wine merchant explained.
With only one market in mind, the Chinese chateau owners are also making wine tailored to their palate, according to Stephane Toutoundji, a consultant with two Chinese-owned chateaux.
"They prefer smooth wines without too much tannin and not too much oak, and they hate bitterness," he said. "They want charm, elegance and balance."
Being a Bordeaux chateau owner also provides an incredible brand-building opportunity in the most dynamic wine market on the planet.
"The Chinese know French wine and Bordeaux but they rarely know the names of wines," explained Shen, which leaves the door open to new Bordeaux brands.
And Shen, with 200 retail stores, 3,000 employees and the exclusive Chinese distribution of Eurostar Diamond Traders Blue Flame 89-facet diamond, knows something about marketing luxury goods.
He also has access to a long roster of VIP clients, the corporate gift market and wedding planners.
"If we sell our jewellery for weddings, why not our wine?" asked Zhou Linjun, a Tesiro executive who oversaw the chateau purchase.
Once their Laulan Ducos brand is established, they plan to sell wines produced by other estates under the Laulan banner label.
"It sounds to be a very savvy purchase from a potentially major Chinese player," commented Anson. "It's remarkably well planned, and part of a larger strategy."
Despite confidence in his company's marketing strength, Shen admitted the investment to build his wine brand in China could cost more than the chateau, but declined to reveal the purchase price.
Share This Article With Planet Earth
Farming Today - Suppliers and Technology
Bordeaux, France (AFP) March 1, 2011
The Chinese jewelry group Tesiro has bought a French family-owned wine chateau in the world-renowned Bordeaux region, industry officials told AFP on Tuesday. Group managing director Shen Dongjun signed the final purchase agreement late Monday with the Ducos family, owners of the Chateau Laulan Ducos since 1911, according to the regional wine-growers' association. The 41-year-old executiv ... read more
|The content herein, unless otherwise known to be public domain, are Copyright 1995-2010 - SpaceDaily. AFP and UPI Wire Stories are copyright Agence France-Presse and United Press International. ESA Portal Reports are copyright European Space Agency. All NASA sourced material is public domain. Additional copyrights may apply in whole or part to other bona fide parties. Advertising does not imply endorsement,agreement or approval of any opinions, statements or information provided by SpaceDaily on any Web page published or hosted by SpaceDaily. Privacy Statement|