AXA wine portfolio

  • Friday 6 June 2008

How did French insurance giant AXA build such a varied wine portfolio,
including Suduiraut and Quinta do Noval? And why did they put an
Englishman at the helm? JOHN LIVINGSTONE-LEARMONTH finds out

Walking down the streets of Bordeaux with Christian Seely, his rolling gait catches the eye. A combination of forward motion and lateral impulse, it’s as if he had sailed the high seas. In fact, he admits taking a cargo ship from Liverpool to Rio de Janeiro when he was 17, and his father James was in the Norwegian merchant navy for two years. Seely Jr dresses like a man of finance, but walks like a man of the outdoors. An Englishman of some importance in the Bordeaux firmament, Seely is trusted with the management of Châteaux Pichon-Longueville, Suduiraut, Petit- Village and Pibran. His employer is the very French insurance giant AXA, the destination of many of France’s most enlightened cadres straight out of business school. Yet it chose to put its faith in a foreigner who studied English at Cambridge University. Even AXA’s wine involvement is a matter of curiosity, and perhaps a little scepticism for some in the French investment community. It is hard to understand where the payoff lies, given that this is a company whose function is to invest in order to secure yields that cover many of life’s everyday mishaps – and ensure there’s something leftover for shareholders. Vineyards as assets and bottles of wine as dividends from what is known as AXA Millésimes do not figure on the AXA balance sheet, since it is a company that lies outside the main group frame. So what is the purpose of it all, and what is this seafaring Englishman doing at the helm?

Like many things in life, it pays to inspect one’s roots. The instigator of

AXA’s wine project, the then chairman Claude Bébéar, has the grass-roots origins – he describes his grandparents as ‘peasants from the Dordogne’ – that few, if any Anglo-Saxon chairmen of public companies could match. Bébéar used to pick the family grapes, and would help his father, a teacher, to bottle the cask of Burgundy that the family bought every year – wax seals and all. ‘Large insurance companies invest in forestry and land, so it wasn’t completely mad to invest in vineyards,’ he says.

Opening the Douro

Bébéar’s first manager in 1987 was Jean- Michel Cazes of Château Lynch-Bages. That was when AXA bought into French vineyards – starting with 2nd growth Château Pichon-Longueville Baron, the and the small Nuits-St-Georges estate of Domaine de l’Arlot. Cazeswas a logical choice – a man of action to take on the Baron, who was regularly being upstaged by the Comtesse across the road. Come the depressed year of 1993,

with the good timing that all investment companies should possess, AXA bought the sleepy Quinta do Noval port estate in the grapevine that AXA had bought Noval,’ recalls Seely, ‘and

I managed to get an interview with Jean-Michel Cazes. Jean-Michel had his hands full in Bordeaux, so I was hired and parachuted in, with the brief to find out what was wrong, and to put it right. At the end of port house, more like a top 25.’

Seely’s wine pedigree played a part in his hiring. His father James had written the glossy book Great Bordeaux Wines in the early 1980s, and Christian had been the translator and historical researcher during six months of visits to 160 châteaux. His own financial pedigree had been buffed up through his attendance for a year at INSEAD, the high-profile French business school at Fontainebleau, southeast of Paris: that move, with an MBA at the end of it, no doubt boosted his appeal before a Gallic interview panel. What they probably also noted in the then 33-year-old Englishman must have been his natural charm and clear ability to get on with people, allied to a simmering sense of drive to get things done. These attributes would – in time – go down well within the restrained, at times precious, environs of Bordelais wine society and business. For now though, packing him off to the schist hills of Portugal to oversee AXA’s stake in the still highly Britishinfluenced port trade was a low-risk bet for the men of high finance. Tough talking Noval fitted the AXA vineyard approach,

which Seely explains: ‘You take vineyards with a unique, great terroir, ones that are

capable of making a great wine, but that are underperforming. Over 20–50 years,

you bring them up to the required high standard.’ He could have added that

‘underperforming’ tag to many of the Suduirauts and Pichons of the 1980s.

He recalls the early struggles at Quinta do Noval: ‘You could walk around the vineyard and see the problems – plots with almost wild plants, mediocre vines such as the high-yielding Mourisco, half-abandoned areas – vineyards that needed love and attention. I decided to dig up twothirds of the vineyard, and replant with noble varieties.’ Seely found this an intellectual exercise in what was going wrong and what needed to be done. He had past form in the field, having worked in the City at Guinness Mahon Development Capital, where he had rescued edge-of-the-abyss companies. Hard decisions are part of his repertoire, but he laces his stories with humour: ‘We cut yields – 900 cases in 1994 against 5,000 cases in 1985. Only the best grapes went in the lagar system. We used a smaller team of young people for the selection. This provoked a cellarmaster to come to me in tears, saying it was a crime, that it would never have been done in the old times.’

Seely won his spurs at Quinta do Noval, where the Nacional in a trickyvintage such as 2003 is exceptional, and where its Douro table wines show marked promise, avoiding the clumsy overextraction and full-on casking of many new joint ventures. In 2000, Seely was given the big job: taking over the management of all the AXA properties. Now, having been based in Bordeaux for eight years, one senses that Château Petit-Village is his prime wine challenge, and Suduiraut his prime finance challenge. ‘Petit-Village has great terroir, in the heart of Pomerol,’ he says, ‘but we haven’t yet found the key – we didn’t have it in the 1990s.’ His regular formula of lower yields and digging have come into play – lower yields since 2001, and a quarter of the vineyard dug up in 2004, involving 2.5ha (hectares) of poor clone . He regards 2004 as the first vintage when Petit-Village got going; certainly 2005 is the first since 1998 to grab the imagination, as it should, but 2007 is promising too, suggesting more dimension than 2006. Château Suduiraut presents more of a commercial challenge, if only to convert more of the world’s drinkers to the unbridled joys of Sauternes and the foods with which it can be drunk. No doubt Seely’s incipient eye for opportunity is at work here, when he declares: ‘My dream is that Asia will discover Sauternes. In 2001, 2003 and 2005, we sold all the crop en primeur at a pretty good price, which is not usual. But the US market was not interested in 2002 and 2004, since they aren’t blockbuster vintages.’ Suduiraut has regained some of its noble pedigree that was absent during the 1980s and the early 1990s, when early picking and overproduction was a regular issue. The post-Seely wines, likethe 2001 and 2003, are suitably profound and consecutive all through the palate, the 2005 overtly rich, but the 2002 and 2004 both possess a clearer, more fineboned frame than some clumsier older vintages, bringing clearer acidity and lift to the wines.

New World next?

Talking about the AXA winemakers, Seely eases off a little: ‘I am definitely not a winemaker, but I can bring the idea of what kind of wine we want to make, and give strategic direction.’ He tries to give each winemaker as much autonomy as possible, and claims that having the responsibility to look after vineyards is ‘the most fantastic daily pleasure’. As an example of local roots, Serge Ley at Château Petit-Village in Pomerol is from Libourne, a rare local vineyard manager at a high-profile estate. Jean- René Matignon at Pichon-Longueville, the son of barrelmakers from Layon in the Loire, has been in place since 1985, and so has been party to the pre- and post-AXA worlds, ranging from the introduction of cellar cooling systems in 1985 to the installation of a grape maturity index in 1991, and a new storage facility in the early 1990s. The seminal Pichon vintage was 2000: a lightweight diplomat of a wine, representing the old false verity ofBordeaux, with its dilution and lack of stuffing hiding behind a supposedly good name. The 2001 and 2002 represent

gradual progress, but 2003 starts to move matters along, as it shakes off its vintage imprint and expresses freshness on the palate. The 2004 Pichon has a classic structure, with its soaked fruit on the nose offset by live, accentuated fruit on the palate, while the 2006 displays a tight weave that demands it be left until around 2012. These two vintages have an enhanced purity that will stand them in good stead. With consultants at each property – Stéphane Derenoncourt is now at Petit- Village, for instance – Seely is the able conductor of an orchestra full of talent and experience. His job is to make this a coherent tune, and his day of reckoning comes every six months in Paris, where he reports to senior AXA management on the qualityof wines and the financial performance of each vineyard. The development of vineyards is also discussed – projects such as the rebuilding of the Petit Village domaine and vinification unit, the new barrel cellar at Pichon and vineyard replantings in Portugal and Hungary. Where long-term development may lie is the New World.

Seely is openly intrigued by Central Otago Pinot Noir in New Zealand, while Washington and Oregon have been visited more than a dozen times. Spain is on the Old World

roster of possible investment. In the meantime, there is plenty to occupy him – Mas Belles Eaux near Pézenas in the Languedoc to develop (see right), the Douro table wines to refine, and Domaine de l’Arlot in to bring along, a property that has been under Seely’s baton only since January 2007. the 2001 and 2003, are suitably profound and consecutive all through the palate, the 2005 overtly rich, but the 2002 and 2004 both possess a clearer, more fineboned frame than some clumsier older vintages, bringing clearer acidity and lift to the wines.

New World next?

Talking about the AXA winemakers, Seely eases off a little: ‘I am definitely

not a winemaker, but I can bring the idea of what kind of wine we want to make,

and give strategic direction.’ He tries to give each winemaker as much autonomy

as possible, and claims that having the responsibility to look after vineyards is

‘the most fantastic daily pleasure’. As an example of local roots, Serge Ley at Château Petit-Village in Pomerol is from Libourne, a rare local vineyard

manager at a high-profile estate. Jean- René Matignon at Pichon-Longueville, the son of barrelmakers from Layon in the Loire, has been in place since 1985, and so has been party to the pre- and post-AXA worlds, ranging from the introduction of cellar cooling systems in 1985 to the installation of a grape maturity index in 1991, and a new storage facility in the early 1990s. a lightweight diplomat of a wine, representing the old false verity ofBordeaux, with its dilution and lack of stuffing hiding behind a supposedly good name. The 2001 and 2002 represent gradual progress, but 2003 starts to move matters along, as it shakes off its vintage imprint and expresses freshness on the palate. The 2004 Pichon has a classic structure, with its soaked fruit on the nose offset by live, accentuated fruit on

the palate, while the 2006 displays a tight weave that demands it be left until around 2012. These two vintages have an enhanced purity that will stand them in good stead. With consultants at each property – Stéphane Derenoncourt is now at Petit- Village, for instance – Seely is the able conductor of an orchestra full of talentand experience. His job is to make this a coherent tune, and his day of reckoning comes every six months in Paris, where he reports to senior AXA management on the qualityof wines and the financial performance

of each vineyard.

The development of vineyards is also discussed – projects such as the rebuilding of the Petit-Village domaine and vinification unit, the new barrel cellar at Pichon and vineyard replantings in Portugal and Hungary. Where long-term development may lie is the New World. Seely is openly intrigued by Central Otago Pinot Noir in New Zealand, while Washington and Oregon have been visited more than adozen times. Spain is on the Old World roster of possible investment. In the meantime, there is plenty to occupy him – Mas Belles Eaux near Pézenas in the Languedoc to develop (see right), the Douro table wines to refine, and Domaine de l’Arlot in Burgundy to bring along, a property that has been under Seely’s baton only since January 2007.

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