Bordeaux's new red army, by Tristan Rutherford
Spear's, January 2017
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 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, Maxwell Baynes Vineyards, leads the pack in Bordeaux vineyard sales. They’ve sold 12 this year, four to Chinese buyers. We pull up outside the decadent white mansion of Chateau Milord, a property Lily sold in 2013. 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 mostly Merlot 2016 vintage bubbles in brand-new fermentation tanks. Prior to Chinese purchase, the bottles produced here for around €3 a piece 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 the vineyard's 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. In 2016 the region welcomed Jack Ma, one of the mainland’s richest men, when he purchased Chateau Perenne for a reported €16 million. According to source close to the deal, Ma and his colleagues plan to buy another 20 Bordeaux vineyards in the coming year. “We always use a Chinese speaking intermediary,” Cheung tells me, “whether in purchasing the estates and also in later wine making and management.” Which is good news for Lily and her British boss at Maxwell Baynes Vineyards.
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 frosted vines of Graves and Pessac-Léognan to Bordeaux city centre. There’s prosperity in the air. In July a new TGV arrives from Paris, rendering the French capital two hours away. London to Bordeaux via Eurostar will then be a five-hour hop. 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 marketing budget of €20m it’s arguably the most important wine body in France. The globalised nature of Bordeaux is expounded by communications expert Christophe Chateau. “Foreigners have been present for 500 years,” says Chateau. “British, Dutch, German, Japanese.” The current CIVB president is an Englishman.
Such attitudes pay dividends. Fifteen years ago Chinese foreign wine consumption was close to zero. Now the nation takes 25% of all Bordeaux exports. With a yearly consumption of 66m bottles, China recently overtook Britain as Bordeaux’s largest overseas market (don’t worry, we still drink more Champagne). Chateau, who visits the mainland four times each year, has the CIVB’s latest facts at his fingertips. “For example, last month the average bottle export price to China was €4.41.” 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 she will hopefully spend. “Our average bottle export price to Hong Kong is €28.40.”
Do the CIVB welcome the rash of foreign vineyard owners I witnessed yesterday? “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 adds 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. Rising vineyard prices – and hefty French inheritance taxes – have made estates very difficult to keep 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 Maxwell Baynes Vineyards. 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. They are just more astonishing sums from a uniquely international market. But as 26% of the world’s billionaires now hail from Asia (just ahead of North America), the demand is manifest. As Lily concludes: “We used to be a poor country. Now we are rich.”
Read more travel stories about Bordeaux from food and drink writer Tristan Rutherford