WE PLAN TO CONTINUE OUR EXPANSION

In today's context of financial crisis and minimal harvest, Pierre Castel, one of the major French wine merchants (and the oldest, at 82 years of age) explains his company's strategy of expansion.

Sud Ouest : Your company acquired the wine merchant company "OEnoalliance", based in Beychac, Gironde. Do you have other investment plans in the Bordeaux area?

Pierre Castel : OEnoalliance was in financial difficulty but benefitted from a strong image in the distributor brand market which Castel needed to develop. As for other projects in Bordeaux, our priority is volume and brands. If we found suitable opportunities....

S.O : What is your opinion of the Alsace group, Grand Chais de France, which is also expanding rapidly?

P.C : Everyone has competitors but we are not racing against eachother! Each company is working to keep it's head above water especially at the moment when the wine business means large turnovers but small profits ; it's the opposite for my other activities. However, due to certain problems with my partner, I sold my shares in the water business for 860 million euros.

S.O :That sum would enable you to invest in a classified growth château, something still missing among your company's assets.

P.C : Even though the company has considerable cashflow, we don't intend to waste money. A celebrated property? Perhaps, if a good proposition comes up, but nothing overpriced ; wine remains an agricultural product, subject to climate and other risks. I have however invested in the beer industry in Guinea and Nigeria. I am very interested in opportunities in Africa and never hesitate to invest there. As for buying a wine property, it is imperative to study the figures...

S.O : You are one of the most important buyers of wine in France. What do you think of the 2008 vintage which is the smallest yield since 1991?

P.C : There will be no shortage of wine because there is plenty of stock. We have contracts with wine growers for 2000 hectares in the Bordeaux vineyard for our branded wines. We will buy only what we need and no more. Moreover, people are drinking less wine : our wine sales will be down by 3% by the end of the year. The lower price range is suffering and the future lies with the quality wines. In Bordeaux, many of the wines do not reply to the demands of emerging markets, who are looking for easy to drink, fruity wines. In the Val de Loire area, where we are investing 30 millions euros in a bottling plant which will process 1.4 million hectolitres, you cannot find any more muscadet to buy and the vineyard is in a state of neglect.

S.O : What about development of your export market?

P.C : Exports represent a third of our sales and we plan to expand in Russia, where we already employ 150 people in a bottling and distribution centre near Moscow. China is also another objective. The UK, German and US markets are difficult at the moment.

S.O : The famous "Bag-in-Box" is still selling well?

P.C : Yes, and we are investing in packaging plants for this product, mainly for the 3 litre containers. I would never have imagined putting AOC wines or even branded wines in this type of packaging, but in fact the product sells well.

S.O : What advice would you give to young people hoping to make a career in the wine industry?

P.C : They must have some money to invest. If they need to finance their whole project with a loan, they are taking a big risk.Bordeaux remains the best French vineyard in which to invest.

César Compadre

doc@sudouest.com


S.O. 4/11/08
Translated by Maxine Colas.

MODERATION MUST BE OUR GOAL.

Thursday saw a succession of demonstrations against the censorship that the wine world in France believes it has fallen victim to in recent months. Alain Juppé, Mayor of Bordeaux, was photographed as he symbolically covered up a road sign indicating the city's name.

This photo was shown all over the world : Bordeaux, the world capitol of wine having it's name covered up by a large sticker with the word "Censored". The scene took place yesterday in the Place de la Bourse, opposite the Garonne River. It was an example among many during this day of demonstrations against what the wine industry in France considers to be unfair censorship.
Indeed, wine professionals in France, the world leader in production, consumption and exportation of wine are "furious, to say the least,"says Alain Vironneau, who is the president of the Bordeaux Wine marketing board. He was not alone. Over 150 professionals and political figures were present at this symbolic masking of the name of the world's most famous vineyard.

A succesion of obstacles has hit the French wine industry recently. The first is in the legal grey area surrounding the use of the Internet as a marketing medium for wine and other alcoholic drinks. Then comes the absence of a clear definition of publicity as opposed to informative articles about wine in the press. In addition to these debates, the government has just voted a rise in taxation on wine and spirits in order to cover the Social Security deficit. Finally, there is talk of banning free wine tastings during wine fairs.

"All this handicaps the professional wine sector, when what we need to concentrate on most is encouraging consumers to practice moderation. That should be the universal goal," explains Mr.Vironneau.

All over France, the operation, named "Censorship - a sign of things to come", was described as a great success by the organisers. It's aim to draw public attention to the debate was achieved and Alain Juppé, along with two pillars of the Bordeaux wine community, André Lurton and Jean-Michel Cazes, rallied the troops : "Prohibition has never worked," said a stern Alain Juppé, "...this is not just a question of selling bottles. In France, the fruit of the vine represents one thousand years of history and a national, cultural heritage which encompasses a craftsman's art and a landscape."
Jean-Michel Cazes, owner of Château Lynch-Bages in Pauillac, urged observers to "..realise that some people in this country want to abolish our profession. Be prepared to fight to save it!"
The idea certainly seems to be gaining ground.


To be continued....on sudouest.com : visit our website for photos and videos of the various demonstrations by wine professionals in the region, as well as interviews of Jean-Michel Cazes and André Lurton and send in your views to our forum.


César Compadre

doc@sudouest.com


S.O. 31/10/08
Translated by Maxine Colas.