Bordeaux's Chinese-owned vineyards, by Tristan Rutherford
Tonic, October 2021
Lily Li speeds through rural Bordeaux like a rally driver. “Chinese have no time,” she explains. I grip the BMW door handle as her leopard-print iPhone chirps again. It’s a Taiwanese buyer keen to make an offer on a lakefront chateau with six hectares of vines. “He has 2,500 restaurants in China and 3,000 shops. Distribution is no problem.” The price tag is €3m. The purchaser has only seen the property once.
Morning mist clouds the Pomerol estate as we motor past medieval Saint-Emilion. Lily’s Christie’s-affiliated employer, Vineyards Bordeaux, leads the pack in Bordeaux vineyard sales. We pull up outside the decadent white mansion of Chateau Milord, a property Lily sold a few years back. How many times did the purchaser view this one? “None but he trusts me,” says Lily. That’s a multi-million Euro purchase, sight unseen.
The five white vans outside Chateau Milord indicate how popular the proprietors of Bordeaux’s 150 Chinese-owned vineyards have become. Each truck contains a team of local French plumbers, electricians or telecom specialists working overtime to satisfy the new owner’s expectations. The chateau’s freshly renovated parquet floor is topped with bubble-wrapped packages. “For this room €50,000 of art just arrived,” Lily explains. A tractor prowls the grounds beyond. “The Chinese owner was told that land is not suitable for more vines so he makes a golf course. But just nine holes.”
While I wait to interview the owner, Lily walks me through Chateau Milord’s cellar. The latest vintage bubbles in brand-new fermentation tanks. Prior to Chinese purchase, the bottles produced here for around €3 apiece would be sold in stock to négociants, Bordeaux’s traditional wine traders, for a mark-up of between 50c and €1. Now the entire stock is shipped directly to China – at a cost of €10 per bottle – then sold on shelves for around €21. Last week four shipping containers of Chateau Milord departed for Guangzhou in time for Chinese New Year.
“I think Chinese buyers will continue to purchase Bordeaux vineyards like Chateau Milord,” says its proprietor Edwin Cheung. “Few Chinese have a personal interest. Individuals and conglomerates buy with a view on business instead.” His domaine’s pricing structure in China shows that owning a Bordeaux vineyard is not only a prestigious endeavour, but a profitable one too.
The trend looks set to continue. The region even welcomed Jack Ma, one of the mainland’s richest men, when he purchased Chateau Perenne for a reported €16 million. “We always use a Chinese speaking intermediary,” say Cheung, “whether in purchasing the estates and also in later wine making and management.” Which is good news for Lily and her British boss at Vineyards Bordeaux.
Cheung’s final point affirms the value of the Bordeaux brand. “For us the name speaks of authenticity, quality and style, unlike wines from the New World.” Bordeaux’s popularity is maintained by a basic supply and demand equation – you simply can’t take the terroir with you and copy it back home. The ceremony associated with Chinese gift giving pairs perfectly. Each bottle of Bordeaux has an intrinsic value backed by centuries of heritage. It’s impossible to lose face. Government officials and businessmen alike love a bottle of Chateau Margaux – and they can even re-gift it after Googling the price.
The following morning I drive through the vines of Graves and Pessac-Léognan to Bordeaux city centre. There’s prosperity in the air. The quays, where wine once sailed for Britain and the Americas, are lined with new Audis and Mercedes, not little Citroëns. On Bordeaux’s central square I enter a gloriously ornate building that propels the city’s enduring wealth increasingly towards China.
The Conseil Interprofessionnel du Vin de Bordeaux, or CIVB, represents 6,500 regional wine producers. With a budget for marketing alone of €20m it’s arguably the most important wine body in France. The globalised nature of Bordeaux isn’t new says communications expert Christophe Chateau. “Foreigners have been present for 500 years - British, Dutch, German, Japanese.”
Such internationalism pays dividends. Twenty years ago Chinese foreign wine consumption was close to zero. Now the nation takes 21% of all Bordeaux exports. With a yearly consumption of 48m bottles, China recently overtook Britain as Bordeaux’s largest overseas market (although Brits still drink more Champagne). Chateau, who visits the mainland four times each year, has the CIVB’s latest facts at his fingertips. “Last month the average bottle export price to China was €5.72.” It’s these millions per month volumes of fairly standard wine – embossed with the renowned Bordeaux marque – that Chinese customers currently lap up. Importantly, the richer China becomes, the more it’s hoped the country will spend. “Our average bottle export price to Hong Kong is €41.”
Do the CIVB welcome the rash of foreign vineyard owners? “Our business is to sell wine,” says Chateau. “Many Chinese buyers have the distribution network in place to sell millions of bottles across the mainland.” The images of popular billionaire Jack Ma or actress Zhao Wei owning a Bordeaux vineyard only add to the allure. Moreover, after reports of fake wines being sold in China, the CIVB is delighted that Chinese are buying wholesale into his industry. “Then they have a stake in safeguarding the brand’s future,” says Chateau. “It’s been the same for centuries – each purchaser becomes an ambassador for Bordeaux.”
En route to my final meeting, I gather my thoughts. The Bordeaux brand seems unstoppable in China, as does the country’s wealth. As a further example, actress and Bordeaux vineyard owner Zhao Wei employed a soil consultant who works with Domaine de la Romanée-Conti and a winemaker from Petrus to assist at her Chateau Monlot vineyard. Zhao then sold her entire stock of 64,000 bottles in 24 hours flat. Can anything spoil the party?
“Chinese buyers see Bordeaux chateaux as a safe, stable place to park their money,” says Wine Spectator contributing editor Suzanne Mustacich, whose recent book Thirsty Dragon highlights the Chinese fascination with Bordeaux wine. “But don’t forget they live in an unpredictable regulatory and political environment. In theory anything could happen.”
Mustacich also highlights the ready supply of wine-producing domaines coming up for sale. Rising vineyard prices – and hefty French inheritance taxes – have made it very difficult to keep estates in the family. That said, it’s not that business-minded Bordelais are especially keen to sell to Chinese. “If Icelanders arrived in Bordeaux, flush with cash, the Bordelais would be just as happy to sell to them.”
In the departures line at Bordeaux Airport, Chinese students chat on Huawei handsets as they queue. I receive a final update from Lily at Vineyards Bordeaux. She hasn’t sold the lakefront property yet, and I tease her for not shifting this €3m domaine. “Well, I have a buyer interested in a Grand Cru property worth hundreds of millions,” she counters. Her commission for such a sale would be seven figures – just one more astonishing sum in a uniquely international market. But as 38% of the world’s billionaires now hail from Asia, according to Swiss bank UBS, the demand is manifest. As Lily concludes: “We used to be a poor country. Now we are rich.”
Tristan Rutherford writes features about French wine for France Today and France Magazine.