WineTime France News

This isn’t really “hot off the press” news, but I can confirm the sale of the famous Clos des Lambrays estate in Morey Saint Denis.

What is news, is that we finally have an idea of the price it was sold for…101 million euros!!!

Yes Burgundy seems to be selling its top estates to investors…with a preference for French industrials, at least for the moment. This is proof that Burgundy is finally edging out Bordeaux as the place to not only buy the wines, but also, when possible, the illustrious estates too. So who is the lucky owner? Well its the luxury goods groups LVMH, through its flamboyant CEO, Bernard Arnault. The LVMH group already possesses brands such as Moet & Chandon, Dom Pérignon, Veuve Clicquot, Ponsardin, Krug and Ruinart, to name just the champagne houses. LVMH also owns the famous Bordeaux estates of Château d’Yquem and Château Cheval Blanc.

Bernard Arnault is now a neighbour to his business rival, François Pinault, CEO of Kering group, and who also owns luxury brands such as Gucci, YSL, Boucheron and the sports brand Puma. He acquired the Domaine d’Eugénie from the Engel family in 2006.

The Clos des Lambrays covers 8.66 hectares or 21.6 acres and produces around 35,000 bottles of the Grand Cru nectar par year. Considering the price LVMH paid, that means around 2886 euros per bottle!! The real price is fortunately for (some ) of us only 120 euros a bottle.

The vineyard dates back to 1365 when it was run by the Cistercian monks of the Citeaux Abbey. It was divided between 74 owners during the revolution in the late 18th century, but thanks to Albert Rodier, the estate was renovated  in 1866 and his two sons, Camille (who founded the Order of the Knights of Tastevin – Clos de Vougeot) and Albert took over until Albert in turn passed on the estate to his friend Renée Cosson in 1938. The estate slumbered until 1979 when, under the supervision of Roland de Chambure and the brothers Fabien & Louis Saier, the Clos des Lambrays was decreed a Grand Cru in 1981.

Since 1996 the estate has been owned and kept to a very high standard by Gunther and Ruth Freund.

This is just one of the A list estates to be sold recently. The Chateaux De Meursault and the Chateau de Marsannay are the property of Promodès CEO Olivier Halley since 2011. Maurice Giraud is the owner of Chateau Pommard. But how long until foreign investors start circling around prime estates. The power of money will always have the last say, as can be seen by the example of a chinese businessman buying the Chateau de Gevrey Chambertin in 2012. The estimated price of this 4 acre vineyard and 11th century monastery was 3.5 million euros. After bidding between two French pretenders reached 4.5 million, the chinese bidder threw 8 million euros on the table and blew the other bidders away.

Despite lobbying and chest beating rhetoric from regional vintners associations and other governing bodies, the harsh reality is that foreign investment is here to stay and keeping Burgundy “Burgundian” or at the best “French” is becoming less evident and foreign flags flying over the local “domaines” an imminent possibility.

Two things should be noted, the value of wine on the futures market, bringing added value to any multinational’s portfolio on the one side, and the rising taxes putting a heavy burden on the small estates, who, after suffering four years of low yields, are now finding how difficult it is to maintain profitability. Yes Burgundy’s intricate patchwork of small, family-run estates is going through a slow transformation and the need for a higher yield to help profitabilty inevitably leading to estate sales and mergers.  It’s a (not so) simple case of “evolution”.