Chinese investors conquer French vineyards

Paris is holding a massive trade fair this week, showcasing France’s most famous export. The prestige of French wine attracts investors from afar, trying to copy France’s expertise and, some fear, take it away. Some 160 Chinese investors have already bought their own wine-producing chateaux. Should French wine-makers be concerned?

Door Jan van der Made

For the first time, two major wine shows, ViniSud and VinoVision have merged to form France’s biggest wine fair at the Porte de Versailles exhibition centre in Paris. Visitors from all over the world stroll through two of the exhibition centre’s huge halls to taste and assess the “haut de gamme” – high quality wine. This year's show attracted many visitors from mainland China.

“French wine has been very important in China from the beginning, because of Bordeaux,” says Chinese wine aficionado Eric Xu, who says he is a tourist. He came to France to discover French wines. He went on a trip to the Languedoc region where he visited two chateaux, and now comes to the French capital for Wine Paris.

Chateau Lafite

He thinks that French wine exports to the Chinese markets “have taken flight” in the last three years. “In the beginning, Chinese people only knew Bordeaux as [Chateau] Lafite,” he says, after it was made famous by Hong Kong film star Chou Yun Fat, who famously bragged about being a fan of the vineyard that produces bottles worth 4,000 euros.

But in the last two or three years, people have started to discover that France has many more different kind wines of very high quality, so more and more Chinese people come to France to find the right business partners,” he says. “China is the future,” says Louis Luan, a Chinese man originally from Dalian on mainland China, but now working for the wine firmDempt Frères, adding that Burgundy wines are becoming popular in the People’s Republic as well.

Capitalist revolution

China and France established diplomatic relations in 1974. In 1979, China started its capitalist revolution. Four years later, state-owned food giant COFCO started to produce its Great Wall wine that was meant to compete on international markets. Soon it was joined by the Dynasty brand, a joint venture between Tianjin City Grape Garden and Rémy Martin. It was one of the first ever Chinese-foreign joint ventures.

Even if Chinese-produced wines won international prizes, the real ‘connoisseurs’ preferred imported wine. Some of them went all the way. Today, Chinese investors own 168 chateaux in France, aiming to export their produce to the Chinese mainland.

The House of the Imperial Rabbit

Names include Chateau Richelieu in Fronsac, now owned by the Hong Kong-based A&A International Holding, Chateau Monlot, in Saint-Hippolyte, owned by actress Zhao Wei, known for her role in John Woo’s The Three Kingdoms, and Chateau Moulinet, which is one of the four wine-producing chateaux owned by Chinese multi-billionaire Jack Ma, owner of the Alibaba retail group.

The book Le Vin, Le Rouge, La Chine ("Wine, Red, China"), by Laurence Lemaire, who researched Chinese investment in the French wine industry, lists many of the Chinese-owned chateaux, noting that in some cases names were changed to facilitate Chinese taste, citing Chateaux Larteau, in Arveyres, that became “Chateau Lapin Impérial,” (“Imperial Rabbit”.)

So are French wine producers worried about Chinese inroads into one of France’s flagship industries? “It’s not a problem now,” says one of the owners of a Bordelais Chateau who preferred to remain anonymous. “But in the future it may be. But then again, there were the Americans, the Japanese. Now it’s the turn of the Chinese. It is an increasingly globalized world.”

Mass production

But asked if they are really scared about Chinese competition, the French wine elite shrug their shoulders. Investment may be significant but the quality of the products is unconvincing, says Alan Tain, an oenology student who follows the developments with a critical eye. “They are more concentrated on mass production,” he says. “They want quantity, instead of quality. They want to have a label like 'Bordeaux' and they only like it for the ownership. It’s not high quality. Not all of them,” he admits. “But the majority behaves like this.”

Rieu is optimistic, “the fact that Chinese invest so heavily in France could be a bit scary, and people might be afraid that this could lead to the loss of French heritage.” However, in the end it could also prove positive for these particular vineyards, because those investors also have an entry to their own market. “The fact that they invest here doesn’t only mean that there’s capital coming into France, but it is also a better opportunity for French wine to be able to penetrate the Chinese market,” he says.