Grand Cru or Brand Cru? LVMH’s Symbolic Move Into Burgundy
APRIL 24, 2014 | Story: ZACHARY SUSSMAN | Photo: COMMONS
Burgundy has always seemed immune to luxury branding. But LVMH's recent purchase of a storied grand cru vineyard has many worried that the region is amidst a cultural reorganization that's been years in the making.
To the uninitiated, it might seem like a lot of fuss over a single plot of pinot noir. But when luxury goods conglomerate LVMH announced it had purchased Clos des Lambrays, one of Burgundy’s historic grand cru vineyards, the news couldn’t help but generate controversy. “Get excited for Grand Cru lip gloss,” one Twitter user quipped, joining a chorus of warnings to buy up what’s left in the market before the inevitable price hike hits.
When it comes to Burgundy, emotions tend to run high, and this isn’t the first sale to spark debate. Consider 2012, when Macau businessman Louis Ng purchased Chateau de Gevrey Chambertin, prompting a conservative group of winemakers to protest, outraged that the estate should enter foreign hands. Ironically, LVMH’s acquisition of Domaine des Lambrays signals a return to French control after nearly two decades under the stewardship of Ruth Freund and her late husband Günter, the German couple who purchased it in 1996. While the current conversation isn’t being framed along such jingoistic lines, questions of heritage and local identity still remain at stake.
Traditionalists are now beginning to fear the widespread infiltration of corporate culture in the region, which they believe poses a threat to the very ideals that make Burgundy, well, Burgundy.
In other words, they’re worried it might become the next Bordeaux.
Over recent years, journalists have often commented on the way Bordeaux—with its aristocratic Châteaux, consulting enologists and jet-set owners in Armani suits—has lost cachet among a “geeky” subset of drinkers who revere things like artisanship, tradition and the expression of place.
Burgundy, on the other hand, has enjoyed an exalted, almost spiritual status in the collective imagination, championed as a region of small family growers who have been working the land in the same way for centuries. According to this paradigm, at least, to drink Burgundy is to align with a distinct set of values: a small-scale, agricultural, “dirt-under-the-fingernails” approach to wine as a form of culture rather than a commodity. Or so the popular narrative goes.
Given its growing identity as status symbol for the ultra rich, there now appears to be two sets of values that Burgundy represents: tradition and authenticity on one side, luxury, rarity and exclusivity on the other. If this is indeed the reality, the question begs to be asked: will the power of the latter be too great for the values of the former to survive?
But as soaring international demand pushes prices even further through the glazed-tile roof, and wealthy collectors keep snatching up bottles of Jayer and Roumier like so much Burgundian bling, the dichotomy is no longer so clearly defined. Case (literally) in point: last November in Hong Kong, a twelve-bottle lot of 1978 Romanée-Conti Grand Cru, one of the region’s most prestigious wines, fetched a record $474,000 at auction. Is it safe to assume that buyers are shelling out such astronomical sums in the noble pursuit of “terroir,” or could something else be driving the recent Burgundy craze?
Given its growing identity as status symbol for the ultra rich, there now appears to be two sets of values that Burgundy represents: tradition and authenticity on one side, luxury, rarity and exclusivity on the other. If this is indeed the reality, the question begs to be asked: will the power of the latter be too great for the values of the former to survive?
In the region’s defense, author and former Slate wine critic Michael Steinberger distinguishes between perceptions of Burgundy among buyers in the global marketplace and the attitudes of those who actually tend the vines. “The fact that the top wines now command such exorbitant prices has not changed the culture,” he insists. “In contrast to the Champenois and the Bordelais, the Burgundians do not think of their wines as luxury goods, and many of them are horrified by the prices the wines now command.”
No matter how much contempt local winemakers might feel about price inflation, it shows no signs of abating, and LVMH’s recent expansion into the area has driven home anxieties in a visceral way. While large multinationals continue to dominate the landscape in Bordeaux and Champagne—where the story of corruption by money is nothing new—Burgundy has always seemed to resist luxury branding, so the shock resonates on a powerful level.
While he’s not yet ready to sound the alarm bells, Steinberg does admit that there’s reason to be concerned. As wine prices climb, so too does the value of land, and he views the exorbitant cost of real estate to be a major part of the problem. “Land has become so expensive in Burgundy that it is has become very difficult for family owned domaines to expand, and at this point, it seems only corporations and the extremely affluent can afford to buy vineyards on the Cote d’Or.”
Burgundy-based exporter Becky Wasserman agrees, viewing LVMH’s purchase of Lambrays as the latest chapter of a long record of sales and re-acquisitions. “In rereading the history of the domaine, it seems to me that part of its destiny is to be sold, broken up and put together again,” she says. “Perhaps Herr Freund was the last of the ‘benefactors,’ as his purchase saved the estate from being parceled out once again. Now it has been sold at a price that was probably above what local négoçiants or domaines could realistically afford.”
The idea that a revered property like Lambrays should require a “benefactor” is unsettling, but given current economic realities, including France’s notorious inheritance tax, it may indeed prove challenging over time for Burgundy’s small estates to remain under family control. “A few years ago,” Wasserman mentions, “Michel Lafarge, of Domaine Lafarge, said that perhaps Burgundy would not belong to Burgundians in the future.”
Fortunately, no one sees this transformation happening overnight.
For one thing, by virtue of the structure of the Burgundian model, corporate investors will face certain inherent barriers. With its multiple growers, relatively small scale of production, and complex vineyard system, Burgundy doesn’t lend itself to being marketed in the same way as Champagne or Bordeaux. Those regions, like Madonna or Cher, can be reduced to a single iconic name (think “Cristal” or “Mouton”), sometimes even one syllable: A bottle of “Dom,” anyone? Alas, the nomenclature becomes a bit trickier with regard to “Domaine Alain Hudelot-Noëllat Vosne Romanée Premier Cru ‘Les Suchots.’”
As Tyler Coleman, the author behind the popular Dr. Vino blog, points out, it’s also highly unusual for an entire vineyard to be put on the market, let alone a prestigious grand cru like Clos des Lambrays. “The region’s top wines are typically made from extremely small holdings in prestigious vineyards, where one owner often has just a few rows of vines,” he explains. “This works against anyone buying a whole bunch of land in one crack. If someone wanted to roll up and consolidate Burgundy, it would take a long time.”
It’s too early to tell whether history will lead us to believe we’ve been watching a major cultural reorganization, or just a slow trickle. In the case of Clos des Lambrays, at least, LVMH has announced it will retain winemaker Thierry Brouin, who has overseen the last 35 vintages at the estate, signaling their desire to soothe anxieties about any inconsistencies in the glass. Likewise, a source close to the company maintains that they’re not actively pursuing further acquisitions in the area.
In a larger way, however, the estate has now become the testing ground for a significant experiment, and its future track record will help pass a verdict on a far-reaching question: to what extent can large corporate entities be trusted to safeguard quality and preserve authenticity?
“The dam hasn’t broken yet,” Steinberger comforts. “The situation is disquieting because of what it may portend, but Burgundy is still Burgundy.”
Hopefully, it will be able to stay that way for quite some time.
