LVMH Burgundy deal prompts concerns among winemakers

news  %tages LVMH Burgundy deal prompts concerns among winemakers
Several Burgundy winemakers dread that the arrival of French luxury goods group LVMH in their province, via its acquisition of Clos des Lambrays, could lead to an unwelcome era of huge companionship owners and 'astronomical' wine prices.

LVMH has bought 8.66 hectares of Clos des Lambrays, located in Morey-Saint-Denis and one of the largest grand cru vineyards in Burgundy. While the deal has not come as a surprise to many, particularly seeing as Clos des Lambrays was known to be on the market, some producers see the go as a perilous sign of things to come in Burgundy.'I reckon there are several growers who don't see this as a excellent thing, because tomorrow there will be no winemaker owner,' said Stephane Magnien, who's namesake domaine also lies in Morey-Sain-Denis.'The ancient Burgundy that we know will no longer exist. It will be worked by workers, and respond to the market.'He said the fee of vineyards in Burgundy means inheritance tax is becoming a headache for small-scale producers who, out of principle, don't want to cover the extra costs by charging 'astronomical prices' for their wines.'It's a worrying evolution,' added Caroline Parent-Gros, of Domaine A-F Gros, speaking on the LVMH deal. 'The cost of the land in Burgundy has augmented so much that it is now really disconnected from the profitability. Owning a vineyard is today quicker to owning a cut of art than a productive asset.'Our concern is that, in a link of years, family domaines would have to sell their vineyards to huge financial groups if they cannot [afford to] keep their lands in the family, as they have done for many generations.'Outside of the LVMH deal, one could contend that Burgundy has, in a sense, become a victim of its own success. Simon Staples, Asia director at Berry Bros & Rudd, last year declared 2013 the year of Burgundy in Hong Kong. Auction house Sotheby's saw Domaine de la Romanee-Conti wines achieve $7.2m in global auction sales last year, more than any of the Bordeaux first growths.Jasper Morris, Burgundy buyer for Berrys, said that he expects LVMH to raise the fee of wines from Clos des Lambrays in the near future, to reflect the market demand.But, the LVMH deal itself has only highlighted a wider ongoing tension in Burgundy, rather than caused it, he said, speaking to on the sidelines of the Decanter World Wine Awards judging week in London's Tobacco Dock, where he is chair of Burgundy tastings.'Some people like the thought of higher prices, but many don't at all,' he said. Traditionally, 'Burgundy is a wine for drinking, not for speculation', he added.

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