Beaujolais Land Rush

Burgundy wine houses have big plans to turn around their southern neighbor
Robert Camuto
Posted: June 13, 2008

In the rolling storybook hills of France's Beaujolais, image problems, scandal and declining sales have flattened land prices, pushing some growers and vignerons to the brink of financial collapse. Yet one region's crisis is another's investment opportunity, as wine houses to the north in Burgundy are responding to Beaujolais' blues by heading south with checkbooks in hand to buy up prime estates at good prices.

The influx of Burgundy houses is sure to bring change and needed investment to Beaujolais, an ancient wine region and home to the world's largest concentration of Gamay vines. But the Burgundians' purchases raise questions about the area's future and its wines: Will its distinctive Gamays get pushed to new highs? Or will Beaujolais become a southern annex—a junior version of its richer neighbor—producing generic Burgundies?

"It's a good time to buy, but there is a lot of work to do," said Louis-Fabrice Latour, managing director of Maison Louis Latour, which took control of Vins Henry Fessy in northern Beaujolais in January and now plans to more than double Fessy's land holdings, starting with the purchase of Château des Reyssiers, a 37-acre estate in Régnié. "There are quite a few of us in Burgundy who believe there is great potential in the terroirs of Beaujolais."

Henriot, owner of Bouchard Père & Fils, recently purchased Château Poncié in Fleurie. Stanislas Henriot, the son of owner Joseph, said the company is looking for other prime vineyards to add to Poncié's holdings. Other Burgundy wine houses, put off by skyrocketing land prices on their home turf, are lining up to buy Beaujolais properties at what they see as relative bargains. "Burgundy has been very successful, so it's natural to help the Beaujolais people—they are our brothers," said Pierre-Henry Gagey, president of Maison Louis Jadot. The négociant firm has owned land and made wine in northern Beaujolais since the 19th century, adding to its holdings 12 years ago with the purchase of Château de Jacques in Moulin à Vent. "Of course, it is a question of opportunities also," said Gagey.

The buying action is concentrated in northern Beaujolais' picturesque neighborhood of hills and granite soils, home to both the Beaujolais villages vineyards and the cru vineyards of 10 villages with their own appellation designations: Brouilly, Chénas, Chiroubles, Côte de Brouilly, Fleurie, Juliénas, Morgon, Moulin-à-vent, St.-Amour and Régnié. The southern half of Beaujolais and its limestone clay soils produce lesser-ranked wines generically called Beaujolais.

"Beaujolais will come back on the world scene—be reborn from the ashes—through the crus," said Frédéric Drouhin, CEO of Maison Joseph Drouhin in Beaune, who said that he is "looking around" for opportunities in Beaujolais, where his family's négociant company has sourced wine for more than a century. Drouhin, who calls Beaujolais "clearly part of Burgundy and not a separate region," believes that buying in Beaujolais, unlike in Burgundy's Côte d'Or, represents a profitable investment. "A hectare [approximately 2.5 acres of vineyard] in the Beaujolais crus costs 30,000 to 100,000 euros," said Drouhin. "One hectare of premier cru land in the Côte d'Or starts at a million."

Leading Beaujolais négociant Georges Duboeuf feels the worst of the region's economic woes are behind it.

The Burgundy négociants clearly believe that new management and investment will improve the fortunes of Beaujolais, which has been economically damaged by the souring of public taste for the region's best-known product, Beaujolais Nouveau. The fresh and fruity wine suffered a 21 percent decline in exports in 2007 alone. Overall demand for Beaujolais has dropped more than 20 percent in the last decade to 10.5 million cases in 2007, according to Inter-Beaujolais, the region's wine-trade group.

Demand for the Beaujolais crus has held relatively stable, however, even increasing in big Beaujolais markets such as the United Kingdom and Japan. In the U.S., now the biggest Beaujolais buyer, imports of Nouveau fell 9 percent last year while the cru wines declined 1.4 percent.

"The wines of Beaujolais are fabulous values right now," said Gagey, who is fond of reminding guests that Gamay is a crossbred descendent of Pinot Noir. "Gamay, when it is done well, can be extremely nice." Gagey is also quick to distinguish the cru wines from Beaujolais Nouveau, "which we have always believed was a kind of fashion and not the true roots of Beaujolais."

The arrival of the Burgundy houses has been generally welcomed in Beaujolais as the sign of a comeback, even by the area's dominant player. "It's all very positive. It challenges us and comforts us at the same time," said Georges Duboeuf, the négociant who popularized Beaujolais Nouveau beginning in the 1970s and remains its leading representative. Duboeuf also makes a large array of village and cru wines.

There is a sense in Beaujolais that the worst of the bad times is over. Duboeuf, who defends Beaujolais Nouveau as the world's leading harvest-time wine and points up the positive reception of his new Beaujolais Nouveau rosé in 2007, blames the crisis on overproduction and lack of controls during disastrous vintages such as 2004. He said that recent steps, such as the removal of 20 percent of the vineyards of southern Beaujolais in the last three years, should rebalance supply and demand.

Jean-Paul Brun, one of the most highly regarded small, independent producers in Beaujolais, said that while the interest by big Burgundy players is inflating land prices in the north of Beaujolais, the overall effect is positive, "proof that Beaujolais will come back."

"Beaujolais suffers from a bad image," said Brun, who is based in the southern half of the region but also makes four cru wines. "But it's a wine that corresponds to today's tastes. The big, body-builder wines are out of fashion and people are looking for more finesse."

The Burgundy-Beaujolais wine map is complex even by French standards. Technically considered part of greater Burgundy, Beaujolais has the right to label much of its wine as ordinary Bourgogne. Yet the two appellations differ in their soils, their grapes and especially their winemaking techniques. In the last 40 years, the overwhelming majority of Beaujolais producers have used carbonic maceration (also called whole-berry fermentation), which produces light, fruity wines with few tannins.

But in recent years a countermovement of Beaujolais traditionalists has returned to classic winemaking methods that resemble Burgundy's—destemming and crushing grapes, using ambient yeasts and aging the wine in oak barrels. "People relied too much on overproduction and technology and removed themselves too far from terroir and quality," said Brun, who has been a leader among the traditionalists for 20 years. "Now things are going in the other direction."

Also in the traditionalist camp, Burgundy négociant Nicolas Potel has successfully teamed with Beaujolais winemaker Stephane Aviron to produce cru wines. "We wanted to create traditional wines as they were made 40 years ago," Potel said. "Everybody thought we were crazy. But the customers are coming back because Beaujolais offers low-priced terroir wines." Potel likens the current climate of Beaujolais to "Napa 40 years ago—people are trying different things to find the right formula."

But while some producers are looking to the cru wines as the region's salvation and others are trying to produce better-quality Gamay wines, in southern Beaujolais, some growers are tearing out their Gamay and planting Pinot Noir and Chardonnay. That suggests Beaujolais' future could lie as a source of low-cost Burgundy, something small growers in the lower-rated appellations of traditional Burgundy may not be happy about.

Latour said he is looking for Beaujolais vineyards to replant with Chardonnay. But as president of Burgundy's Union of Négociants, he said such moves have met resistance from Burgundy growers. A recently introduced compromise in grower-négociant talks would take away Beaujolais growers' use of the Burgundy label, but allow them to bottle Chardonnay and Pinot Noir under the moniker Coteaux Bourguignon.

"We want to help the Beaujolais people with Chardonnay and Pinot Noir," said Latour, "but without upsetting our friends, the winegrowers from Burgundy … It's very political … and French."

France-based writer Robert Camuto is the author of Corkscrewed: Adventures in the New French Wine Country, which is scheduled to be published by the University of Nebraska Press this fall.

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