Hot on the heels of the Russian desire to buy into the Cognac phenomenon, now it seems it’s the turn of the Chinese to turn a lusty eye towards the region. Reminder: China is about to become the biggest market for Cognac – and not the cheap stuff.
By the way, did you know? We have a Chinese version of the blog
With cognac being a symbol and wealth and position in the country, and the acquisition of brands such as Menuet Cognac by Hong Kong / China Cartak (Madini) Intl. Co Ltd, it should probably come as no surprise that there are moves for further related purchases of vineyards.
Since the beginning of the year there has been an increase in the number of searches in the region carried out by wealthy Chinese businessmen, according to the realtors, Coldwell Banker France & Monaco. They say that interested parties in recent years have been dominated by Russian investors, and whilst these continue, they now have increased competition from the Chinese.
And with China already the second largest importer of cognac (and largest in terms of aged qualities), and deep pockets to boot, it seems that the Russians might well now have a fight on their hands.
Laurent Demeure, president of Coldwell Banker France & Monaco said,
“We have seen strong demand from Russians in recent years who wanted to acquire vineyards in the Cognac region to benefit from the controlled appellation.”
It seems that at present the Chinese investors are focusing on the premier cru regions, where prices of various sized vineyards are in the three to six million euro region (depending on square hectares).
“Chinese investors are willing to offer a high price to acquire these (vineyard) areas, because they are aware of the success of this product in their country and are in a position, thanks to their knowledge of the local market, to provide themselves with distribution to the Chinese middle classes.”
So, is this a good thing for the Cognac industry? And what effects might it have in the future?
Well, in our opinion, surely purchasing vineyards has to be a long game strategy for the Chinese. After all, the cognacs that they’re interested in are older qualities, and that’s not something that can be rushed, whatever way you look at it. So in this respect it puts money into the industry in the long-term, helping to stabilize what is a burgeoning demand.
And for the growers, this also provides a welcome guarantee for income in what has always been a tough industry. However, on the flip side, it also means that cognac production is gradually being moved out of the hands of the French, which some might see as an issue. But being as the French represent only a tiny proportion of those who enjoy cognac, perhaps it might not be something that the industry is too concerned about.
Whatever your view, the cognac industry is changing. And anybody who works in the industry, or simply has a love for eaux-de-vie, can’t fail to see the changes. An industry only remains current if it stays dynamic, and perhaps this injection of Chinese cash is exactly what’s needed in our ever-changing world…