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Burgundy tries to avoid ‘Bordeaux example’ as Asian buyers flock to Beaune

There were 30% more Asian buyers at this year’s Hospices de Beaune compared to last year, auction house Christie’s said.

Louis-Fabrice Latour

Christie’ssaid it has never seen as many Asian buyers pre-registered for the annual barrel auction this weekend (17,18 November), but Burgundy is taking a ‘prudent’ approach to China, industry representatives say.

Christie’s wine specialist Michael Ganne said pre-registered Asian buyers increased by ‘at least 30 per cent [compared to last year] the most we have ever had’ since Christie’s began managing the sale seven years ago.

Ganne could not differentiate between buyers from Hong Kong and mainland China but ‘Asian interest’ in the auction reflects the increase in demand for Burgundy, according to statistics released at the morning press conference.

In the first seven months of 2012, wine sales increased by 19% in volume and by 42% in value to Hong Kong, compared to the same period last year – and a 65% increase in volume and 39% increase in value for mainland China.

The exciting potential of the mainland Chinese market however raises concerns that demand could deprive more traditional markets of rare Burgundy.

Pierre-Henry Gagey, president of the Burgundy Wine Council (BIVB), told journalists that Burgundy plans to take a ‘prudent’ approach to sales there in Asia.

‘We believe in a deliberate development of the market; we do not want to follow the Bordeaux example,’ he said. ‘We are not here to rob Peter to pay Paul.’

Gagey explained that as of this month, a BIVB office based in Shanghai was opened to set up specific training seminars for potential buyers.

A single representative will establish a network of key merchants who are committed to promoting Burgundy wines; he or she will also monitor the Chinese market for fraudulent use of Bourgogne appellations.

This cautious attitude was echoed by several winemakers in Burgundy over the Hospices weekend.

‘We do not want to see yo-yos; we prefer to maintain even sales throughout various markets – and to know our buyers,’ Frederic Mugnier of Domaine Jacques Frederic Mugnier told Decanter.com.

While there is no shortage of offers from Asia, some producers are anxious to understand the market before they get involved.

Jacques Devauges of the highly-regarded Domaine de l’Arlot, which is owned by insurance company AXA, said although Chinese importers have contacted the domain, ‘we have not sold to them because we would like to have a better picture of where the wine will end up.’

He explained that Hong Kong is ‘no problem’ because of previous experience, but ‘we need to study the market in mainland China better’.

Statistics indicate that Asian demand in 2012 has also been fuelled by the more traditional Japanese market, up by 35% in value in 2012.

‘We believe that Japan could be the second largest export market by the end of the year,’ Louis-Fabrice Latour, president of the Negociant-Growers Federation of Burgundy said.

‘At the pace that it is going, it is not impossible that Japan will surpass the UK; the outlook is also encouraging with the yen at very high levels, driving force for demand as well.’

Written by Panos Kakaviatos in Beaune

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