As Bordeaux sales soar in China, Asian investors snap up wineries

A glass of Chateau Lamothe's signature red 2002 Chateau Lamothe de Haux Bordeaux

On a glass coffee table in his Hong Kong high-rise, Peter Kwok eagerly unrolls an aerial photograph of the wine estate he bought in November. His Chateau Tour St.-Christophe grows merlot and cabernet franc grapes in the St.-Emilion appellation of Bordeaux. With his finger, he traces the outline of its 42 acres of old vines, then points out a dark-green slope.

"Those vines may produce the best wine," says Kwok, managing director of USI Partners, a Hong Kong holding company that owns hotels in China and Tibet.

Kwok, 63, is one of at least 12 Chinese investors who have recently bought a chateau in Bordeaux, the world-famous wine region noted for great reds such as Ch. Petrus and Ch. Mouton Rothschild.

Since 2008, these investors have purchased mostly small, little-known and sometimes distressed wineries. At least 10 more deals are said to be in the pipeline.

Kwok declined to reveal what he paid for Tour St.-Christophe. A Bordeaux estate similar to Kwok's but with one-third the vineyard area was being offered in January for $4.5 million.

During the past two centuries, Bordeaux's grand stone chateaux have attracted buyers from Belgium, Germany, Japan, the Netherlands, Britain and the United States.

In 1997, Kwok bought his first estate, Ch. Haut-Brisson, also in St.-Emilion, where the Romans planted grapes in the second century.

Kwok and other investors are buying chateaux as demand for expensive Bordeaux wines soars in China.

Consumers on the mainland swallowed almost 20 percent of Bordeaux's exports in the year ended Oct. 31, a 122 percent jump over the previous year, according to the Bordeaux Wine Council.

With that increase, China became the biggest importer of Bordeaux wines by volume.

The Chinese proprietors are spending to improve their wines before selling some or all of their production directly, without a distributor, through their own hotels and wine stores in China.

For Kwok, making wine in Bordeaux is part of his long love affair with French culture. His Chinese parents raised him in Saigon, Vietnam, where he says he learned to admire French architecture, dark-roast coffee and crunchy baguettes. He later served as chairman of Citic Resources Holdings, the energy subsidiary of China's biggest state-owned investment company, Citic Group, from 2002 to 2007.

Kwok now sends 30 percent of Haut-Brisson's annual production of 90,000 bottles to the hotels he owns in China and Tibet.

His 2006 Haut-Brisson La Reserve fetches $166 a bottle at his Four Points by Sheraton and St. Regis hotels in Lhasa.