France Link

Wealthy Chinese lose taste for French vineyards

A once massive series of acquisitions of prestigious French vineyards by wealthy Chinese investors has largely dried up and become sold up after Beijing's disapproval of flashy spending and its clampdown on capital outflows, but also because of the effects of the Covid pandemic and culture clashes with French workers.

La rédaction de Mediapart

This article is freely available.

Perched on the banks of the Gironde estuary in southwestern France, the pink mansion of Chateau Loudenne is surrounded by 116 acres of planted vines that run downhill toward the water, reports Bloomberg.

Until recently, a pole on its bay-facing terrace carried the corporate flag of its then-owner — mainland China’s largest listed company.

Kweichow Moutai Co. bought the 17th-century property in 2013 to produce wine for the burgeoning middle-class back home. But its failure to deliver drove the vineyard into receivership and ended with its March sale to a French entity. As the new owners put Loudenne’s lost decade behind it, there are few remaining signs of its previous proprietor at the castle other than a lone bottle of Baijiu, China’s traditional alcohol, displayed in one of its salons. 

“They kind of failed in the development of their wine activity,” Philippe de Poyferre, the chateau’s general manager, said in an interview. “There was no sense for them to continue with Loudenne.”

Moutai’s Loudenne misadventure is just one of many examples of the dashed hopes of Chinese investors who poured millions of dollars into French vineyards over the past decade, lured by the success of the likes of Alibaba’s Jack Ma and popular movie star Zhao Wei. Joining other wealthy foreign Bordeaux vineyard buyers from the US, UK and elsewhere, for the newly rich Chinese it became the ultimate status symbol.

But a confluence of factors — China frowning on flashy spending and clamping down on capital outflows, the pandemic and culture clashes with French workers — made it impossible for several Chinese buyers to succeed. After being the top foreign investors in the market for a decade, they are rapidly disappearing from the scene. When Vineyards-Bordeaux, an affiliate of Christie’s International Real Estate, sold 13 properties in the last 14 months, there were no Chinese bidders. 

The retreat is emblematic of a broader pull-back by Chinese entrepreneurs from ambitious international expansions in a wide range of sectors, from luxury goods to insurance.

Read more of this report from Bloomberg.