Chinese investors now rival French on the Bordeaux vineyard market with more than 100 properties in France’s Bordeaux region currently being owned by Chinese investors looking to diversify their portfolios.
Both Chinese and French each account for approximately one third of the Bordeaux market, according to real estate agency Maxwell-Storrie-Baynes.
To date the Chinese own only 1.5% of the total 7,000 vineyards in the region, however, they only emerged on the market six years ago. The past three years have shown continued and strong interest with more than 24 properties being bought by Chinese investors annually, with the most prominent Chinese investor being Qu Naijie, an industrialist who now owns 30 Bordeaux vineyards.
China is the biggest consumer of red wine in the world and is Bordeaux’s top export market, buying 60 million bottles in 2014. Record sales and profits were reported until 2013 when a combination of austerity measures imposed in China, slow economic growth, increased competition from winemakers in South Africa, Australia, Chile and the U.S., and more highly-informed, price conscious consumers caused a decline in sales of 17.5% and a decline in volume of 9%. In response, Chinese investors are bringing in economies of scale and industrial efficiencies to what were small family-run operations. Investors are spending large sums to bring together several properties each worth approximately €5 to €15 million each to produce large, commercial volumes of wine for export. While this does not make some in the region happy, other recognize innovation as necessary and positive.
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