The Chinese importer Summergate and Domaines Barons de Rothschild (Lafite) have decided to end their very successful seven year partnership, chiefly because Summergate does not want to sell a portion of itself to DBR. With the recent massive success of Lafite in Chinese markets it is no surprise that DBR would wish to take control of the importation procedures and capture additional profits for this vertical integration. Instead, they will now import into the Chinese market using the distribution services of ASC Fine Wines.
Ian Ford, the managing partner of Summergate, indicated that there was simply a divergence of strategy between the two companies. DBR wished for control and Summergate wished to remain independent. Having rebuffed the purchase proposal, they could no longer remain in business together. Ford stated, “Clearly we took the decision not to sell any stake to DBR with full knowledge we were going to part ways. It was a long-considered decision”.
Summergate believes that China is a huge market with enough room for several different brands and will now concentrate on Burgundy. In an effort to capitalize on the efforts of the Burgundy trade body (BIVB) for a Chinese marketing campaign, Ford indicated that Summergate has “plans with two companies in local regions to market and distribute Burgundy in very significant amounts in 2011”.
Summergate is already working with Bouchard Pere et Fils and has contracts with three other Domaines. Burgundy and Italy – particularly Tuscany – are poised to experience rapid Chinese growth in the coming year. Popularity of Bordeaux in China is indubitably because of its history, rarity, prestige and very high prices. Might wines from Tuscany and Burgundy in particular perhaps also fit that profile very well…?