The History of the Most Infamous Sale of Vineyard Property in France—The Burgundy Land Sale to the Chinese
In the Middle Ages, regimes in Western Europe were referred to as the Kingdom of Burgundy. The cities of Genoa and Lyon are significant in the modern-day Burgundy area of France, Italy, and Switzerland, including Burgundy’s historical province. Western Burgundy, part of the Regnum Burgundian, was known as the Duchy of Burgundy. The French Carolingians took it back from Boso and held it until the dissolution of the French monarchy in 2016.
Figure 1. Burgundy Land sold to the Chinese
The Sale Progress
Throughout the weekend, many people’s minds were focused on such concerns. As long as you are not a renminbi-buyer, you will have a good time at Burgundy’s most significant annual wine party, which takes place over three days and is centered on the Hospices de Beaune charity auction[1].
The Hospices, a former hospital, and almshouse now one of Burgundy’s most prominent vineyard owners, auctioned their most recent vintage of wine. They were recognized for making some of the most excellent wines around. The auction, as an early indicator of interest in a vintage, also measures the overall health of the wine industry in Burgundy.
The price of grand cru Bordeaux had risen during the previous decade, making Burgundy vintners envious, afraid, and bemused simultaneously. Wines from Domaine de la Romanée-Conti and Leroy, Armand Rousseau, and a few other prominent producers have all seen their prices remain mostly stable.
On the other hand, there have been recent signals that this may be changing. High-end Bordeaux wine prices have dropped as Chinese investors have expanded their wine holdings to take advantage of China’s rising interest in wine.
The Chateau de Gevrey-Chambertin, a wine-producing estate in the Burgundy hamlet of the same name, was purchased by Macau casino mogul Louis Ng in August 2012. For the first time, a Chinese buyer invested significantly in a winery in Burgundy.
On the other hand, Chinese purchasers have purchased a sizable number of Bordeaux chateaux, numbering in the hundreds. Burgundy, which faces the Atlantic Ocean, is more cosmopolitan and economically oriented than Bordeaux, a landlocked region controlled by families. The Burgundians remarked to the Bordelais: “Let them have their brilliant neo-Renaissance chateaux” (many of which are owned by absentee retail tycoons or insurance firms)[2].
The xenophobic tone of Burgundian attacks on Mr. Ng and his wealth is striking. However, Burgundy consumers throughout the globe have reason to fear a rise in speculative interest in the region and its wines.
Why the Sale was Inevitable
As a starting point, there are fewer bottles of Burgundy made each year than there are bottles of Bordeaux. Fewer than 3% of France’s total wine production originates there.
The last several years have been everything from ordinary. For the previous three vintages, the amount of grapes harvested in Burgundy has been much lower than usual, notably in 2012 and 2010. Since 2007, sales in China and Hong Kong have surged six-fold, according to the Burgundy wine producers’ group[3].
In its research for the 2012 vintage, the organization underlines the importance of producers maintaining their markets by limiting international speculation and controlling price hikes. Customers in both traditional and developing markets should expect to see price hikes. However, these increases will be kept under control. This was a critical factor to consider in an increasingly competitive sector.
Even though only tiny quantities of wine were made, the 2012 crop is already being acclaimed as magnificent, and we will learn more about it once it reaches the market.
Many individuals expressed concern that Burgundy was losing its historic conservatism in favor of the glitz and riches of the global market as a result of this choice. Gérard Depardieu, the actor and director withdrew from the event only hours before it was scheduled to begin for unknown reasons.)
As it turned out, French photographers seemed to outnumber Chinese billionaires. Asian purchasers contributed less to the total value of wine purchases this year than last year, with a 12 percent share (by one percentage point). Ukrainian billionaire Igor Yankovsky purchased Corton Grand Cru’s most costly barrel. When Ms. Bruni-Sarkozy replied that she and her husband would personally deliver the item, the price went up to €270,000, or $345,000[4].
Figure 2. A Burgundy wine tasting at the Hôtel-Dieu in Beaune
This year’s wine auction raised a record-breaking €5.9 million for charity despite the lower-than-expected amount of wine sold. Burgundy drinkers still have more reason to be on their guard. No wine can ever be considered cheap in Burgundy. There are just a few small-scale producers, most of whom use manual labor, who produce it. If you are looking for a wine region with a continental climate, Burgundy is your best bet. As a result of recent developments in the Burgundy market, bargain hunters may have to seek farther afield than they previously did[5].
The Real Deal and Reasons to Worry
This historic castle in Gevrey-Chambertin, Burgundy, is up for sale. It dates back to the 12th century. As a Burgundy appellation, it has one of the most sought-after locations in the region. Regional vintners, many of whom could not acquire the site, have already voiced their displeasure with the plan. It is only fair that the government helps these vintners, who safeguard a priceless national treasure. For a record-breaking sum of $10 million, a casino tycoon from Macau acquired the castle from its former owners in France in 2008[6].
The home had a $7 million asking price but ended up selling for $8 million. Consequently, Burgundy experienced an increase in investment from outside the country. The fact that the estates in Burgundy are still tiny and owned by winemakers who perceive themselves first and foremost as farmers, regardless of how much money they have earned recently, is hard to disagree with when compared to Bordeaux. While non-local ownership is common in Bordeaux, non-local ownership of homes is unusual in Paris. The harsh response to the chateau sale may not be due to general anti-Chinese sentiment but rather to the contrasting cultural norms between the two countries[7].
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ON THIS DAY
April 12, 2012: Napoleon’s favorite château in the French region of Bourgogne, often known as Burgundy, was purchased by a Chinese gambling tycoon[8]. It caused a stir in France when the proprietors of some of Bordeaux’s oldest vineyards decided to rename them to reflect the preferences of Chinese buyers better.
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References
[1] NEWS WIRES, “French Anger over Burgundy Vineyard Sale to China Tycoon,” France 24 (France 24, August 24, 2012)
[2] Peta Tomlinson, “Why Are China’s Super-Rich Excited about Buying up Vineyards in France?,” South China Morning Post (South China Morning Post, August 11, 2019)
[3] Peta Tomlinson, “Why Are China’s Super-Rich Excited about Buying up Vineyards in France?,” South China Morning Post (South China Morning Post, August 11, 2019)
[4] Eric Pfanner, “Burgundy Fans Have Reasons to Worry (Published 2012),” The New York Times, 2022
[5] Eric Pfanner, “Burgundy Fans Have Reasons to Worry (Published 2012),” The New York Times, 2022
[6] Joel Gehrke, “‘The Bottles Are Not in France’: China Bought Best Burgundy Vineyards, Paris Wine Merchants Say,” Washington Examiner (Washington Examiner, December 13, 2019)
[7] Eric Pfanner, “Burgundy Fans Have Reasons to Worry (Published 2012),” The New York Times, 2022
[8] John Lichfield, “Quelle Horreur! Famed Burgundy Château Goes to Chinese Buyer,” The Independent, August 24, 2012
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