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Agence France-Presse

After over a decade of snapping up Bordeaux wine estates, buying into a dream of elegant living in France and good earnings in their home market, many Chinese investors are now selling up.
Capital controls back home, softening Asian demand for wine and underestimates of the costs of running French estates have combined to push the once-enthusiastic buyers from China towards the exit.
Chateau Latour Laguens in 2009 was among the first Bordeaux vineyards to be bought by a Chinese company, convinced its wines would bring in handsome dividends on China’s domestic market.
More than 200 other estates in southwestern France followed.

Owner Daisy Haiyan Cheng, heir to the Longhai International group, was originally full of ideas for the neo-Medieval building – a tasting room, a boutique, luxury guest rooms.
Today Chateau Latour, with its rising damp and its bat colony – the only occupants – is up for auction. The starting price, without the vines, is just €150,000 (US$162,000).
Other estates have recently lost their Chinese owners too.
In May, the French authorities confiscated nine chateaux acquired in the 2010s by Chinese magnate Naijie Qu, founder of the Haichang conglomerate, after he was convicted of corruption.
In 2022, the chateaux of Golden Rabbit, Imperial Rabbit, Great Antelope and Tibetan Antelope disappeared from the Bordeaux map.
Chinese people can’t invest abroad any more because their money is stuck in China
Li Lijuan, a property agent at Vineyards-Bordeaux
The four estates – thus named by owner Chi Keung Tong, much to the ire of people in Bordeaux – reverted to their original French titles when the head of Hong Kong’s SGV Wines sold them back to French investors.
Many other chateaux are up for sale for peanuts, explained Li Lijuan, a property agent and Asian market specialist at Vineyards-Bordeaux.
She said Beijing’s decision to impose strict controls on capital had dealt a blow to a market already undermined by an overproduction of Bordeaux wine.
“Chinese people can’t invest abroad any more because their money is stuck in China,” said Li.
About 50 Bordeaux chateaux are currently up for sale, she said.

Other disappointed owners are waiting for the market to pick up so they can offload their investments.
Buyers are so scarce that some chateaux are selling for less than half their purchase price.
False expectations have also scuppered the Chinese dream.
“Some investors bought into the French art of living,” said Li.
“They bought a beautiful building, way cheaper than a flat in Hong Kong or Shanghai. But they didn’t think about the financial stability of the estates or investments for the future,” she said.
Europeans reason in generations. Chinese investors think in terms of five-year cycles, after which it’s quite normal to sell
Hong Kong financier Hugo Tian
There are other misconceptions too, according to Safer Locale, a company that helps buyers access property in rural France.
Some Chinese investors, more used to family-run vineyards back home, “underestimated the costs” of running a big French estate and “overestimated the possibilities” of selling expensive-to-produce wines in China’s already crowded domestic market.
“Their economic model was to buy bottom-of-the-range estates, hoping for an immediate return by producing wine at less than €5 and selling via their own distribution networks for €20, €40 or even €100 a throw,” surmised Benoit Lechenault, head of BNP Paribas subsidiary Agrifrance.
While that tactic may have worked for some in the past, it is no longer the case.
Since Covid, China’s domestic wine consumption has nosedived, falling by a quarter in 2023 alone, according to the International Organisation of Vine and Wine.

Then there are climatic factors in France such as hail and mildew, which have dampened the enthusiasm of recent investors, perhaps unaware that it takes several years to start making any money.
“Europeans reason in generations. Chinese investors think in terms of five-year cycles, after which it’s quite normal to sell,” said Hong Kong financier Hugo Tian.
Li agreed, noting the additional complications posed by “different business cultures” and “never-ending changes of management”.
One technical manager, who preferred not to give his name, said he had only met his former boss “once in the space of four years” and had been bombarded with “impossible demands” that “didn’t take into account the life cycle of the vine”.
Some major Chinese investors are here to stay, however.
New Chinese investors will come in a few years. They’ll be more rational and more reasonable.
Hong Kong financier Hugo Tian, investor in a Bordeaux winery
Jack Ma, the billionaire founder of Chinese e-commerce group Alibaba, has spent millions on restructuring a Sours estate in Entre-Deux-Mers. Alibaba owns the South China Morning Post.
Hong Kong businessman Peter Kwok, meanwhile, has taken a longer view by restructuring the vineyards and the edifices on his seven once-dormant estates, one of which produces a rare Saint-Emilion Grand Cru Classé.
At Chateau des Chapelains, Zhang Rong is “clinging on” to the business she bought in 2014. Drawn to Bordeaux initially to source grape varieties for her family’s vineyard in Gansu, northwest China, she is “a winemaker like any other”, says one of her employees.
On her 48 hectares, she produces 300,000 bottles of different batches, which are sold under the Bordeaux and Sainte-Foy Côtes de Bordeaux appellations, and sticks faithfully to what she learned from the former owner, whose clients and restaurants she has kept.
“You have to work hard because the situation has never been so difficult,” she says.

Tian, whose Chateau Fauchey produces high-end Cadillac Côtes de Bordeaux, is also staying.
He said he was counting in “the medium to long term” on the more refined palate of younger Chinese consumers “looking for natural or organic wines rather than prestigious crus”.
“New Chinese investors will come in a few years,” he predicted.
“They’ll be more rational and more reasonable.”


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Chateau Latour Laguens, one of the first wine estates in Bordeaux to be bought by a Chinese company, is up for auction. Photo: AFP

Hong Kong investor Peter Kwok in the garden at Chateau Bellefont-Belcier, one of seven Bordeaux wine estates he bought and with which he is persisting as other Chinese investors give up. Photo: AFP

The owner of Chateau des Chapelains, Zhang Rong, on the doorstep of the cellars of the property. “The situation has never been so difficult,” she says. Photo: AFP

A winemaker works in the cellar of the Chateau des Chapelains winery, owned by Zhang Rong, in Saint-Andre-et-Appelles, Bordeaux. Photo: AFP

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Workers load harvested white wine grapes onto a trailer in a vineyard near the Helan mountain range. Photo: Xinhua

Lu Yongliang, of state-owned, Helan Hong Winery, Ningxia, shows off its products at Hofex, Asia’s leading food and hospitality trade show at the Hong Kong Convention and Exhibition Centre in May 2023. Photo: Elson Li

Visitors to a recent international wine fair in Yinchuan, Ningxia, view one of its displays. Photo: Xinhua 

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Lifestyle

Food & Drink

They dreamed of elegant living in France and good earnings from selling their wine in China. Now many investors have given up or want out


They dreamed of elegant living in France and good earnings from selling their wine in China. Now many investors have given up or want out.


Wine and Spirits

Food and agriculture

France