(first published in Drinks International, 2008, slightly edited here)
Foreign Ownership in Bordeaux
Jane Anson
Bordeaux, as befits a port city, has always been a trading centre, and always had a significant international presence with sales of its wine reaching each continent – but increasingly today, that outside presence can be felt in the region itself, as foreign individuals and businesses buy not only the wines, but bricks, mortar, and terroir.
The sales may have picked up pace recently, but they are nothing new. Some of Bordeaux’s most prestigious chateaux have been owned by foreigners for decades – Chateau Margaux is in the hands of the Greek Mentzelopoulos family, Chateau Leoville Barton has been in the hands of the Irish Barton family for six generations, and Chateau Kirwan has the German Schyler family behind it. The key figures behind these properties have become more French than many of the locals. The locals haven’t always been happy about it, and like to carefully vet their potential investors – in the 1970s they blocked an effort by the National Distillers and Chemical Corporation, an American company, to buy Chateau Margaux, and today, rumour has it that it is almost impossible for Russian investors to get a foot in the door.
But the mood has undeniably warmed up for the majority of buyers. Recent purchases include a Chinese trading company buying Chateau Latour Laguens in Entre deux Mers, British investor Simon Halabi buying Chateau Cantenac Brown in Margaux, Irish millionaire Lochlann Quinn buying Chateau de Fieuzal in Pessac Leognan. There are even rumours that the Russians are closing in on a classified growth in Saint Emilion. According to a source at SAFER, the government land-registry agency, foreign investors today own around 5% of Bordeaux’s 120,000 hectares, and numbers are increasing.
‘The Bordelais have come to realise that foreign investors not only bring new ideas, but energise the whole region,’ says Marc de Weil of French property agency France Prestige. ‘They can also bring useful media attention.’
There was certainly proof of that last year - the Chinese purchase got international headlines focused on Bordeaux, with the news going round the world’s media and blogging sites within 24 hours of the announcement. The 60 hectare property in Saint Martin de Puy, 50km south of Bordeaux centre, had just 30 hectares under vine, and was bought for well under EUR5 million. Under French ownership, it was unlikely to ever be anything more than a run-of-the-mill Bordeaux Superieur estate, just one among many. Under Chinese ownership, however, not only does it have a vast market for its 160,000 bottles, but it also has a great story for its customers, and for the region itself.
There are two main approaches to being an outside investor – those who immerse themselves fully in the lifestyle, moving out to the region lock stock and barrel, or those who buy as an investment, even a vanity project, and remain living elsewhere.
Jonathan Maltus, the owner of St-Emilion's Chateau Teyssier, is very definitely one of the first type. He is the man behind celebrated 'garage' wines Le Dôme, La Forge and Le Carré, and recently bought Vieux Chateau Mazerat in St Emilion. He has employed a smart acquisition and marketing strategy since he moved to the region, looking at his investment as a business to grow, not simply an estate to nurture and pass on. ‘I believe that the French tend to look at business as being production, rather than market, led. This belief is traditional and ingrained. I don’t – we adhere to the accepted Anglo-Saxon premise that the customer is king.’ Many overseas owners also look beyond the traditional market structure of Bordeaux – Maltus does not sell to merchants on the Place, but directly to 40 countries outside of the States and to 30 separate States with the USA, all supported by his own sales team. It’s an approach that has allowed him to expand quickly and effectively – but one that many local winemakers would regard as, ‘not their job’, preferring to leave the selling up to the negociants instead.
Martin Krajewski, of Chateau de Sours, also demonstrates an ability to take a marketing, customer led approach to selling his wines. On purchasing his Bordeaux chateau three years ago, he looked at its strengths and decided quickly to build on them. ‘Chateau de Sours was known for its rosé, and I knew it would take a few years to improve quality of its red and white. So I immediately upped production of the still rosé through buying and renting more vines, raising production from 8,000 to 25,000 cases. In addition, I looked at where a gap in the market existed, and launched a sparkling brut rosé. It was clear that there was less competition in the rosé market in Bordeaux, and more of a chance to make an impression. Increasingly today, of course, everyone is producing a pink version of their wines...’
The ‘Anglo-Saxon’ business models may still raise eyebrows at times – think particularly of British investor Simon Halabi doubling the price of Cantenac Brown from 2005 to 2006, saying he wanted to ‘permanently reposition’ the chateau. Negociants all over Bordeaux have since refused to deal with the property, and Halabi’s idea of weathering the storm and sitting on stocks until the market catches up seems increasingly shaky. But even with experiences such as this, the list of overseas owners at all levels is increasing all the time, each bringing their own experience to bear on the market, and increasingly being welcomed as an essential way to grow Bordeaux’s market share and presence around the world. Who knows, maybe they will even be willing to bring their prices down in the next ‘difficult’ vintage.
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Overseas owners and their properties
Chateau Cantenac Bown – Simon Halabi (British-Syrian)
Chateau Giscours – Eric Albada (Dutch)
Chateau Lascombes – Colony Capital (Canadian), Michael Ryan (Irish) and backers
Chateau Margaux – Mentzelopous (Greek)
Chateau Rauzan Segla – Wertheimer (USA) alco canon
Chateau Lagrange – Suntory (Japan)
Chateau Clauzet, Chateau de Come – Baron Maurice Velge (Belgian)
Chateau Haut Bailly- Robert Wilmmers (USA)
Chateau Haut Brion, Laville Haut Brion, Mission Haut Brion – Dillon family (USA)
Grand Enclos du Château de Ceron – Giorgio Cavanna (Italy)
Château de Landiras – Canadian and Swiss investors
Chateau De Seuil – Nicole and Sean Allison (Welsh-New Zealand)
Chateau Les Cabannes – Peter kjellberg (Canada)
Canon la Gaffeliere – Stephen von Nipperg (German)
Chateau Teyssier, La Dome – Jonathan Maltus (UK)
Chateau de Faugeres – Silvio Denz (Swiss)
Chateau Fonplegade, Roylland, plus four others – Stephen Adams (USA)
Chateau Franc mMayne – Herve Leviale (Belgian)
Chateau Haut Brisson – Peter Dwok (China)
Chateau Lassegue, St Emilion – Jess Jackson and Barbara Bank (USA, of Kendall Jackson)
Chateau La Tour Figeac – Otto-Maximilian Rettenmaier (Belgian)
Chateau Pomeaux – Ted Powers (USA, lives in Hong Kong)
Chateau Bauduc – Gavin Quinney (UK)
Chateau De Fieuzal - Lochlann Quinn (Ireland)
Chateau De Sours – Martin Krejewski (UK)
Chateau Malartic Lagraviere – Jean Jacques Bonnie (Belgian)
Chateau Fomplegade, St Emilion- Stephen Adams