Chinese Throng Burgundy Auction, Barrel Fetches $526,080

Nov. 30 (Bloomberg) -- It looked to be just another humdrum barrel of wine rolled out at last week's 150th Hospices de Beaune, the annual charity auction that historically sets the benchmark price for French Burgundy.

"Very fruity," was the verdict of Christie's International Plc wine master Anthony Hanson on the donated 2010 Beaune 1er Cru Cuvee Nicolas Rolin.

Then China's $2.5 trillion in foreign-exchange reserves -- and the country's growing taste for any fluid festooned French - - transformed a mediocre Burgundy harvest into a vintage of magnificence.

"Sold for 400,000 euros ($526,080)," shouted French film star Fabrice Luchini, who as guest auctioneer slammed the gavel down on a 500-liter "tonneau" of Beaune table wine that Chinese market forces translated into more than 1,500 euros a bottle. The buyer was listed as Patriarche Pere & Fils, a Burgundy negociant.

As the Hospices solons tell it, mostly anonymous Chinese bidders this year accounted for almost 13 percent of the 5.13 million euros in total sales. What the Chinese may lack in expertise they make up for in their desire to buy a lavish label at any price. Merchants use stronger language to describe the auction that doubled the Hospices de Beaune's previous barrel record of 200,000 euros.

Busloads of Tourists

"We are not as fickle or flighty as the Chinese actors," Louis-Fabrice Latour, president of Burgundy's negociants, sulked on the morning after the outlandish night before. Yet to ensure Beijing's boundless cash flow comes back to embellish the French barrel head, Pierre-Henry Gagey, president of the Burgundy Wine Dealers Association, says the 400,000 charity euros banked from the sale of the Cuvee Rolin will be poured into health projects in China.

The cumulative impact of the busloads of Chinese tourists in Beaune for the auction has sent many local wine merchants into a non-alcoholic funk. Taste and pride are at stake.

"It's most sad," says Jean-Francois Rateau, proprietor of Caveau Chassagne Montrachet, a family-run wine emporium tucked into the Grand Cru Montrachet hills. "Hospices wines were already way too expensive and 2010 is by no means near a great vintage."

Still, the average price for 2010 Hospices whites rose 15.7 percent, and was up 12.5 percent for reds, compared with last year.

"The Chinese hunger for what they believe to be luxury wines at any price will come back to haunt us," Rateau warns of Asians' pursuit of Burgundy wine. "What we saw at the Hospices this year is not Burgundy. It's frustrating."

Cavern Huddles

It does, however, make for intriguing detective work. Huddling with Rateau in his dimly lit cavern is John Lonardo, international vice president of Kerdyk Real Estate in Coral Gables, Florida, and a member of the "Raiders of the Lost Vine," a 5-year-old troupe of businessmen and bankers who each Hospices season gather to discover fine long-term investments and, at the same time, ready-to-drink Burgundies at reasonable prices for holiday gift-giving.

"It will increasingly become an exercise in finding wines the Chinese left behind, but not yet," the 60-year-old Lonardo says, illuminating a 125 euro Mazis-Chambertin Grand Cru 1999 from Domaine Dominique Laurent with an iPad flashlight app. "Asian buyers haven't yet learned how to crawl down here and get dirty. They wrongly believe only auction houses, Robert Parker and wine-investment funds know how to track down the good stuff."

Big Vintages

Rateau calls this process the "focus." It's a strategy aimed at isolating "big vintage year" orphans whose unpretentious price tags are sufficient grounds for banishment from the institutionalized glory-wine lists. Instructing Lonardo to turn the glowing iPad to a far wall, the light shines on "2003, the biggest of big vintages," Rateau says.

A few hours and a pail of discarded corks later, Lonardo and French chef Didier Quemener emerge from the cave with indulgent holiday wine priced at less than the cost of a glass of Hospices de Sino-Beaune. The source: A.-F. Gros, a 22-year- old domaine owned by Anne-Francoise Gros, one of Burgundy's few female winemakers.

Gros's 2003 Grand Cru repertoire includes an Echezeaux at 78 euros and a Richebourg at 168 euros. Although the superrich for years have rallied around the poshly expensive Echezeaux offered for thousands of dollars a bottle by Domaine Romanee- Conti, wine historian and critic Clive Coates says Gros's domaine "produces some of the finest wines in Burgundy."

As for the Richebourg, arguably the greatest of all Burgundies, beaming with violets, coffee and chocolate, Gros's 2003 is a sumptuous example of the wine Coates calls "indisputably the best." A few miles south from this Cote de Nuits vineyard, the ancient inscriptions on the walls of the village of Savigny-les-Beaune read: "The wines of Savigny are nourishing, theological and will chase away every illness."

Stocking Stuffers

While anonymous Chinese bidders were inflating the value of what Christie's dubbed the "flesh and harmony" of the village's morbid 1er Cru Cuvee Arthur Girard to 3,600 euros a barrel, Lonardo and Quemener were scooping up 26 euro stocking- stuffer bottles of Gros's wholesome 2003 Savigny-les-Beaune 1er Cru Clos des Guettes.

Guettes's grapes are spiritual. They hail from pinot noir vines grown near the Bois de Noel (Christmas Woods). Rateau says he can only hope the lady's stalwart Savigny and other appellations remain immune from Chinese wineflation.

"The only sure remedy," Lonardo reckons, "is to drink it all before they do."