Thirsty Dragon by Suzanne Mustacich

Author:Suzanne Mustacich
Language: eng
Format: epub
ISBN: 9781627790888
Publisher: Henry Holt and Co.

8

Shifting Winds

The turbulence on the Place de Bordeaux created risk—and opportunity. Jean-Pierre Rousseau considered whether this might be the time to grasp the cash offer sitting before him. He was pushing sixty, and he’d made his name as a négociant since joining Diva in 1987. In the previous year, 2011, sales had shot up 73 percent, from $24 million to $42 million, with the vast majority of the firm’s revenue coming from the export market. China alone accounted for $38 million of the company’s 2011 sales. Diva also had significant stocks of classified growths, and a number of attractive allocations en primeur. The question was where to go from here.

Neither Rousseau nor Diva’s founding partner, Pierre Beuchet, had any children who were interested in running the company, and Diva Bordeaux had gone as far as Rousseau could take it without an influx of new money. The rising prices of classified growths, the wild fluctuations in the market, and the precarious nature of doing trade in China required deep pockets and a strong distribution network. Several négociants had silent backers, but Diva was not one of them. There was, however, an entrepreneurially minded powerhouse eager to stake a position on the Place de Bordeaux: the Chinese government.

As Rousseau weighed his options, he acknowledged that selling to the Chinese might shock the Bordelais aristocracy. But he also thought that this might be where, unconsciously, they’d always been heading. Historically, every conquest of a new market brought a new breed of foreign négociants to the Place de Bordeaux. First, it was the English, then the Dutch, Germans, Scandinavians, and Americans. It was inevitable that the Chinese would acquire an established négociant firm. He just happened to be in a position to profit from the event.

On June 27, 2012, Rousseau and Beuchet signed the final papers transferring a 70 percent stake in Diva Bordeaux to Shanghai Sugar Cigarette and Wine, a subsidiary of the Bright Food Company, Shanghai’s largest state-run food company. Like COFCO, Bright Food had been founded in the early days of Communist China, in 1951. “The investment in Diva has inaugurated a new business model for the Chinese enterprises to invest in Bordeaux wine industry,” Bright Food announced in the official press release. “This will lay a foundation for the cooperation with local wine industry and promote a rapid expansion for the Group in the wine industry.”

Bright Food had in place time-tested distribution channels that covered sixty thousand retail outlets, including China’s supermarkets. It was easy enough for Bright Food to introduce a foreign-made product to the market—only now, that foreign product would be owned by the Chinese government. At the same time, Bright Food got to introduce its own portfolio of products and gain an understanding of foreign distribution networks.

Though Bright Food was not known on the Place de Bordeaux, it was a familiar presence elsewhere in Europe and in the United States, yet another Chinese industrial giant operating with public money as it pursued lucrative assets overseas. Many Chinese

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