A state-owned Chinese conglomerate has purchased a 49-acre château in Bordeaux, gaining a valuable toehold in the region. COFCO, which owns the Chinese wine brand Great Wall, has bought the 49-acre Château de Viaud in Lalande-de-Pomerol for an undisclosed price, after nearly three years of negotiations. More important than the property, however, the sale is part of a wider deal that integrates COFCO into the Bordeaux wine trade. Moreover, it could be a sign that China will soon be investing heavily in its favorite wine region.
“Without a doubt, it’s the most significant Chinese acquisition in Bordeaux to date. They are finally saying, we are, feet on the ground, in Bordeaux,” a prominent négociant told Wine Spectator.
The seller in the deal is Philippe Raoux, a wine merchant who owns three châteaus, including Château d’Arsac, and a wine tourism center called La Winery. The deal cements a partnership between Raoux and COFCO. “It’s enormous,” said Raoux. “The communist state buys land—and not just any land, but a château. It’s extraordinary.” He thinks Chinese investment could help the larger Bordeaux wine industry with its current economic difficulties. “Bordeaux is broken down, except for the top grands crus classes. This is a lucky chance for Bordeaux. They should buy several châteaus.”
Not so much extraordinary as inevitable when one considers the growing Sino-Bordeaux trade. “We have a tradition of welcoming foreigners to develop the market when they have a passion for our wine,” said Georges Haushalter, a négociant and president of the Bordeaux wine councils. “The English, Dutch, Irish … The Japanese came 20 years ago. It’s logical that the Chinese arrive today. It’s a good thing that people like that invest in Bordeaux.”
COFCO, which is a state-owned entity, has diverse holdings in hotels, real estate, finance, logistics, food and non-alcoholic drinks, green energy and biochemicals. It first appeared on the Fortune 500 list in 1994. But for the wine world, it is known for its ubiquitous domestic brand, Great Wall. More recently COFCO has invested in other segments of the wine market, including importing foreign wine and buying foreign vineyards.
“In China, wine consumption is rising. When you say Chilean, Australian or French wine, they are clearly seen as the best options for local consumers,” said Qu Zhe, a COFCO assistant president, last September, just after the company acquired 865 acres of vineyards and a wine cellar in Chile for $18 million.
COFCO’s plans for the Château de Viaud include exporting the entire production directly to their own distribution network in China. Two middlemen—the broker and the négociant—will be eliminated from the equation. COFCO will also buy grapes from growers to produce other wines in the château’s cellars.
“That happens rarely in Bordeaux,” said Xavier Coumau, president of the Bordeaux brokers union. Harvest contracts allow châteaus to buy grapes, but they were originally designed “to help out growers who are hit by hail or frost.”
COFCO will also import and distribute Raoux’s wines in China and together they will create Bordeaux brands for the Chinese market, starting with the 2010 vintage and concentrating on Merlot-dominated reds. “They are happy to have an alliance with a Bordeaux company,” said Raoux, whose son works at COFCO in Beijing. “They don’t want to give the impression that they are colonizing Bordeaux.”
COFCO vice president Chi Jingtao and China’s ambassador to France Kong Quan are expected at La Winery Feb. 16 for their official welcome to Bordeaux. With the growing trade between China and Bordeaux, it may be the first of many such visits for the ambassador.