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Burgundy locks horns with Bordeaux in battle for Chinese market

The 2010 Hospices de Beaune barrel auction has seen Burgundian producers draw the battlelines in the fight for share of the burgeoning Chinese wine market.

‘China is something we’re really targeting,’ said Michel Baldassini, president of the region’s generic marketing body, the BIVB, in a pre-auction press conference.

Announcing a budget of €400,000 to ‘conquer the Chinese market’, Pierre-Henry Gagey, co-president of the BIVB and head of negociant giant Louis Jadot said the region’s commercial focus was firmly on Asia.

‘We need to be there,’ he said, ‘Otherwise the New World producers will gain ground.’ He was most outspoken in addressing the Bordelais approach, however.

‘The prices we’ve seen for top-end Bordeaux are astonishing. But there’s also a huge volume of cheap Bordeaux flooding the market. There’s very little in the middle, at €8–10, and that’s where we need to be. That’s the future, the real potential in China.

‘I believe Bordeaux has made a mistake by exporting such huge volumes of cheap wine to China. We need to emphasise our quality, our terroir – and you can’t do that for €3.’

Asked about the danger of escalating prices at the top-end, Gagey said it wasn’t Burgundy’s intention to create an imbalance with other markets. ‘If China gets the mood [for Burgundy], it could send prices higher. That’s great, but we don’t want them going too high – we just want to sell our wines across the world, in a balanced proportion.

‘We can’t prevent speculation in the grands crus, but that’s not our intention – we don’t want to follow the Bordeaux model. People in Burgundy are loyal. They are more in contact with their clients than in Bordeaux – we have long-term relationships. In Bordeaux, producers sell to the negociants and then the wines goes everywhere and anywhere.

‘So we won’t be putting all our eggs in the Chinese market. The prices of the top Bordeaux have gone too high – it’s artificial. And when that happens, you can get a hard landing.’

Christie’s, which runs the Hospices de Beaune auction, organised tastings in Shanghai, Beijing, Hong Kong, Singapore and Taiwan in the lead-up to the auction, under a concerted campaign entitled ‘From Beaune to Beijing’:

‘We know that the Asian market is very dedicated to Bordeaux right now, so we wanted to give them the chance to discover Burgundy,’ said Christie’s Michael Ganne.

The auction organisers faced early embarrassment, however, when the star-name Chinese film star booked to appear at the event, Liu Ye, had to return to China before the auction to continue filming.

‘He’s promised he’ll come back in a week’s time, with some Chinese journalists, to prove to them that Burgundy is better than Bordeaux’ said Baldassini.

Written by Guy Woodward in Beaune

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