My Article: Why Latour Bought Araujo
Last week’s acquisition of Napa Valley’s Araujo Estate by the owner of Latour underlines the continued interest among France’s top vintners in buying blue-chip wineries in California, but I wonder if anyone else finds it intriguing that they only seem interested in wineries with a long pedigree that make balanced and harmonious reds.
Wineries making high-octane, off-dry reds seem less desirable to European investors. I think they understand that such wines have little to no market outside of North America – they can’t see them as valuable in building a global brand.
For instance, it’s almost impossible to sell California cult wines in Hong Kong, which is arguably the most serious wine collectors’ market in the world today. Hong Kong Chinese loathe that jammy, alcoholic style, and find the sweet fruit in the wines smothers their cuisine. After all, in Hong Kong and of course Mainland China, wines are almost entirely consumed over a good meal of some particular variety of Chinese cuisine. Their palates are more accustomed to dry and tannic wines than sweet and jammy ones.
European buyers also value history, and they can see that the great names of California made extraordinary wines in the 1940s, 1950s, 1960s and 1970s – all of which can still be bought and happily consumed.
I recently drank with friends in Hong Kong a magnum of 1977 Joseph Phelps Vineyards Eisele Vineyard (the core of Araujo’s vineyards) that was stupendous with fine tannins, beautiful fruit and a fresh finish. It had a distinctive mint character that reminded me of a top mature red from Mouton Rothschild or Lynch-Bages. We also drank some old Beaulieu Vineyard Private Reserve Georges de Latour Cabernet Sauvignon Napa Valley.
The various wine merchants and wine collectors at the dinner kept asking why Napa Valley Cabernets are no longer like this. Again and again they repeated that they didn’t buy California cult wines even after having tried them numerous times. They were quick to point out that Screaming Eagle is the exception, but only since they like to give it away to business contacts to make a good impression (or “good face” as they say in Chinese) because it’s so expensive.
I remember a few months ago I had a friendly dinner with Frédéric Engerer, the president of Chateau Latour who negotiated the Arajuo deal, and he served two wines blind. One was a 1990 Haut-Brion and the other a 2002 Abreu Cabernet Sauvignon Napa Valley Thorevilos. The bottle of Haut-Brion was finished before the dinner guests had consumed even half a glass of the Abreu. One of their faces turned bright red from drinking the high-octane Cab and she had to lie down.
There was no Arajuo at the dinner but I know the experience would have been quite different. Arajuo has always been one of my favorite Napa Valley wineries that makes beautiful and balanced wines – both red and white – plus its vineyards are interestingly biodynamically cultivated. The owners of Latour certainly made a great investment in Araujo last week.
James visited the Arajuo Estate before its acquisition to film one of his on-site, HD wine videos. Check it out here.