The news of Cos d'Estournel's purchase of Chateau Montelena is hard to miss, even from my current vacation in Italy. While some will attribute this purchase to the cheap dollar, as a former M&A banker, no purchase of this nature is made without solid strategic reasons. In this case, I think the quotes referenced in Tom Wark's Fermentation blog are correct, that this purchase is ultimately about a recognition of the quality of Calfifornia wine.
Will the Asian wine collector now pay more attention to California wine?
Now that a top Bordeaux chateau has provided a very public endorsement of California wine, my thoughts shift to another place in the world, i.e., Asia, where top California wine has not received sufficient recognition. It's common knowledge that the Chinese have a strong preference for Bordeaux, and are highly brand conscious. Will a top Bordeaux producer's endorsement of California wine cause Asian wine collectors to consider diversifying their collections away from Bordeaux?
In addition, wine investment drives purchases by Asian collectors. The combination of the current weak dollar and the likelihood of greater quality recognition in the future both auger well for further value appreciation.
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