Changyu buys into French chateau for $3.5m

Visitors show interest in products from Yantai Changyu Pioneer Wine Co Ltd at an expo in Yantai, Shandong province. Changyu plans more acquisitions in wine-producing countries such as Australia and Chile next year. [Photo/China Daily]

Yantai Changyu Pioneer Wine Co Ltd, one of China's leading wine producers, has bought a 90 percent stake in the Bordeaux-based Chateau Mirefleurs for 3.33 million euros ($3.54 million).

Chateau Mirefleurs belongs to French drinks company Castel Group.

The acquisition allows Changyu to gain what is called Appellation d'Origine Controlee, or controlled designation of origin－a quality certification granted to certain French wines, cheese and agricultural products.

The deal marks the second venture between the Shandong province-based Changyu and Castel. In 2002, the two built China's first professional winery－Yantai Changyu Castel Chateau.

Located in Yvrac district of Bordeaux, the Chateau Mirefleurs estate grows 55 hectares of vines, planted on south-facing slopes.

The operation made a 40,000-euro loss last year, after being forced to drop its prices, but Sun Jian, Changyu's deputy general manager, expects it to return to the black once more of its high-quality bottles are sold in China.

"This is only the latest step in our expansion. The company is already looking at more chateaux of this quality and character in Bordeaux and other areas of France," said Sun, adding the search is also being extended to main wine-producing countries including Australia and Chile.

Chateau Mirefleurs dates back to the 15th century and grows predominantly merlot and cabernet sauvignon grapes.

It can produce 250,000 bottles annually, and has two registered trademarks－Chateau Mirefleurs and Chateau Techeney.

It was bought by Castel Chateau Co in 1970, a subsidiary of Castel Group, one of the country's top winemakers founded in Bordeaux in 1949.

Changyu already owns the French cognac house Roullet-Fransac Chateau, which it bought in 2013, and Spanish wine producer Marques del Atrio, acquired in September this year for 26.25 million euros.

Sun said Spain is China's third-largest source of imported wines, after France and Australia, "but in terms of value, that market has become the most competitive".

Li Xinxin, chief executive officer of Beijing wine trader Chateaux Haut-vallee, said Changyu's latest acquisition will lift its technology level, enhance its production capacity and diversify its brand portfolio.