Can China Help Bordeaux Out of Slump?

An article in China Daily ‘Bordeaux looks to China Amid Slump‘ reports that Bordeaux chateaux are looking for more Chinese investors:

“Their investment will create a win-win situation since many chateaux are currently experiencing sluggish business and an ever-shrinking market,” said Pierre Goguet, president of the Chamber of Commerce and Industry of Bordeaux, during a promotional event for the China Dalian International Wine & Dine Festival, which is set to open on July 12th.

Commenting on the market hitting the doldrums Goguet said he is optimistic about the investment outlook:

“More merger deals will mean better growth for those brands that boast quality and time-honoured products.”

Goguet plans to bring representatives of 9 enterprises from the region to China to meet investors. Chinese winemakers have also launched a campaign to team up with world-class chateaux overseas.

The article mentions Chateau Lafite‘s new vineyard in Shandong province which is a joint venture with Domaines Barons de Rothschild and Chinese investment firm CITIC which has cost 100 million yuan ($15.87 million) so far.

Apparently, within China, the combined trading volume of faked and genuine Lafite is estimated to be between 2 million and 3 million bottles annually.

That’s one heck of a lot of fake Lafite – the chateau only produces approximately 45,000 cases annually, of which between 15,000 – 20,000 are of the First Wine!

Last year COFCO bought Chateau Viaud and it’s wine business is growing 15% every year according to the company’s president Wu Fei.

The Haichang (Group) Co Ltd, which bought 8 chateaux in Bordeaux, “each worth more than 10 million euros ($14 million)”, has used them to establish a new brand called Lamont. Johnny Wang, Vice President, said that:

“Differentiated strategies for the operation and marketing of the products are key to future development.”

In addition, Haichang has injected a total of 3 billion yuan to build a 333-hectare Dalian International Wine Industry Park in the Dalian Bonded Zone last December and considers wine culture, tourism and trade “three driving forces for growth”. Haichang will build Asia’s largest wine museum to foster a more sophisticated local wine culture.

The Haichang Group have 4 major business enterprises: petrochemicals, oil transportation and freight, real estate investment and business tourism.

They already have two tourist resorts in Dalian: Golden Pebble Discoveryland and Polar Aquarium, plus at least 8 more planned in medium sized cities such as Yantai, Chongqing, Chengdu, Wuhan, Hangzhou and Tianjin.

Statistics showed that China’s retail wine sales hit 70 billion yuan last year and industry research firm Wine Intelligence indicated that the demand for wine among Chinese consumers will maintain an annual growth rate of 18.5% in the next few years.

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