General Chat

Snooth User: Pari Wendy

WARNING : overpriced vineyards in Bordeaux by French owners !!!!!!!

Posted by Pari Wendy, Sep 17, 2013.

Nowadays and for the past few years, vineyards in Bordeaux, France, had been selling as hot cakes to foreign investors, mainly to chinese buyers.
 
The number of vineyards transacted in Bordeaux by chinese investors last year 2012 accounted for about 30 estates and 20 others were still under negotiation by the end of 2012. The Bordeaux region is riding a wave of chinese investment in wine estates as well as wine products bought for the Chinese market by companies and wine agents and many of them are coming from mainland China. The region is seeing numerous chinese investors from wine&liquor companies to new riches to movies stars and/or celebrities buying their vineyard in France. It is noted that among all those properties that were bought by those Chinese, only a few will end up profitable in the future and the majority of the other estates might not be profitable in fact, but it is a matter of prestige, namely a luxury, to own a wine estates in Bordeaux in the eyes of people in China.
 
I was privy to several transactions negotiated with Chinese buyers in Bordeaux this year and it is regrettable that I had seen French owners of vineyards rubbing their hands in glee when seeing chinese buyers visiting their property, hoping that they had finally found gullible and naive investors with deep pockets.
 
Many of those French owners are definitely willing to sell their estates to chinese as their own children often do not want to continue the family business and thus, prefer to cash out while it is still possible and often at a steep price. It is true that the chinese investment in Bordeaux had driven the price up for the past few years in wine estates but there are also unscrupulous owners who will try to find ways to artificially increase the market price of their property in the hope to make a handsome profit; some owners justified their high price by saying that their wine production is organic and biodynamic and are of better quality, others will include their vintage wine from the reserve to drive up the estate's price by 200% or 300% or sometimes even more !  
 
 
It is noted that regularly, chinese buyers carry cash in a shoes' box or plastic bag and partly pay their purchase in a cash form, and french owners have often experienced those practice throughout the years. And knowing the chinese habit of paying in cash, there comes the good part for those owners in Bordeaux, since the France tax rate is quite high on business transactions, the owners of the wine estate generally request a part of the payment to be made in Geneva or Singapore/hong-Kong or elsewhere, out of France preferably, so as to avoid paying too much to the french tax administration and so, up to 30% of the vinyard's price can easily be paid overseas in the form of cash and/or bank transfer.
 
Also, some wine estate like Chateau la Gorce in the Médoc region, one among others, have tried to sell at a very high price the estate to a chinese buyer in arguing that the chateau is classified among the Bordeaux 'Cru Bourgeois' - the lower rank in the classification with 'Cru Bourgeois Exceptionnel' as the first, followed by 'Cru Bourgeois supérieur' as the second - ; but I reckon that there are nearly 300 other chateaux in lowest of 'Cru Bourgeois' classification.
 
Cru Bourgeois classification : http://www.thewinecellarinsider.com...
 
One must wonder here if this 'Cru Bourgeois' rank is really worth its weight in gold, sometime up to 600% above the market price !
Today, for the owners of vineyard in the south of France, convincing chinese investors into buying their property have certainly become a 'challenge' and it is a common topic in the coffee shops in Bordeaux and its regions; if it happens that you are visiting Bordeaux, you will certainly hear the latest transaction made by a Chinese man who bought a chateau worth more than it really is.

Replies

514
2272
Reply by EMark, Sep 17, 2013.

Wow, sellers exaggerating the value of their property.  Trying to avoid paying taxes.

Nouveau riche using money to try to buy esteem.

I'm sorry, Pari, but what about this do you find surprising?

153
373
Reply by penguinoid, Sep 18, 2013.

I'll make sure I don't buy any vineyards in Bordeaux in the near future, then.

20
2631
Reply by Richard Foxall, Sep 18, 2013.

Emark is on a roll with the sarcasm... even unintentionally.  Be careful, you might get stuck in that mode and be unable to get out.

Shame that the Bordelaise think they know everything.  We have a few bankers here who could show them how to turn a sow's ear into a silk purse full of money from the Far East. 

Of course, the original vintners of Bordeaux were the same:  either a nouveau riche merchant/banking class (don't the Rothschilds own some land there?) or titled nobility who wanted the wine lifestyle.  If they want to cash out now, Bordeaux may lose some of its appearance of romance, but it's just one more turn on the wheel of history.  Even those of us who know history are doomed to repeat it--after all, the powerful aren't mulling history, but buying estates and accumulating power and taking us along for the spin.

669
1099
Reply by zufrieden, Sep 18, 2013.

Warning not required for most, but an understanding of economics is never to be scoffed at.  I have a certain vested interested interest in my statement, but am on the level all the same.

669
1099
Reply by zufrieden, Sep 18, 2013.

BTW, continue the political discussion and I may chime in again...


Back to Categories

Top Contributors This Month

324443 Snooth User: outthere
324443outthere
64 posts
125836 Snooth User: dmcker
125836dmcker
64 posts
847804 Snooth User: EMark
847804EMark
57 posts

Categories

View All





Snooth Media Network