Sharp drop in Chinese investments in Bordeaux

Wednesday June 26 2019 by Vitisphere

 “Chinese acquisitions have been significant, but have always remained in a minority compared to domestic investors”, said Charles Traonouëz. “Chinese acquisitions have been significant, but have always remained in a minority compared to domestic investors”, said Charles Traonouëz. - Photo credit : DR

A sure sign that the tide has turned is that Chinese chateau acquisitions no longer make the headlines in Bordeaux. “We have gone from 20 to 5 transactions a year”, summarised Charles Traonouëz, a partner at the Bordeaux-based M&A advisory firm Medicis Partners. He has just published a study that lists 153 acquisitions by investors from China (including Hong Kong, Macao and Taiwan) since 1984, based on sales by the firm, press reviews and Laurence Lemaire's reference book ‘Le Vin, le rouge, la Chine’. After a peak of 35 purchases in 2013, investments have dropped since then, commensurately with the levelling off of Chinese wine imports, which fell sharply last year.

Foreign exchange controls

A break was needed”, said Traonouëz, who claimed that “Chinese investors remain as enthusiastic as ever, but they are pragmatic. If they find a more profitable asset, such as whisky, they switch. They often want to make money quickly, which wine does not allow them to do”. The expert believes the decline in investments can only be partly explained by the fall in imports from Bordeaux. His study points out that since the Chinese government's tightening of foreign exchange controls at the end of 2017, it is more difficult for companies and wealthy citizens to take money out of the country for investment purposes.

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