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A R17k investment in French wine repays bonds

Jun 07 2016 13:20
Marie Mawad and Alexandre Boksenbaum-Granier

Paris - French wine-makers are looking for new investors, and for €1 000 (R16 860) they’ll let anyone in.

Bordeaux-based entrepreneur Maxime Debure says producers in his famous wine-making region, and others like it, need money and they are opening up to raising it online from private investors with smaller tickets.

The 38-year-old oenologist quit a job running two Bordelais chateaus to create a crowd-funding website, called Wine-Funding, that lets anyone buy a stake in wine domains that are just starting, renovating or expanding.

While €1 000 would normally buy you a few bottles of fine wine from some of France’s best-known regions like Bordeaux, it won’t get you a seat at the shareholder table of its most renowned chateaus. Debure’s website is focused on access to smaller producers: the biggest fundraiser under way is for €1m to renovate a 17-hectare property that makes Lussac-Saint-Emilion red.

“Small and medium-sized wine producers are under-funded, in an industry that requires heavy investments,” Debure said. “Wine needs financing to keep facilities modern and bulk up exports. Crowd-funding can fix that, as well as reconnect producers with wine aficionados.”

Debure’s platform opened for pledges last month and is planning to accept projects from other countries, including Italy and South Africa. While it’s focused on investors, it also lets consumers lend wine-makers smaller amounts and be reimbursed later in bottles of the finished product as part of a bond-like product.

The business follows in the footsteps of UK-based Naked-Wines. The customer-funded wine site, which had  sales of £100m in the last fiscal year ending in March, was taken over by Majestic Wine last year for £70m.

France is the world’s second-biggest wine producer in volume after it fell behind Italy last year, according to the International Organisation of Vine and Wine, followed by Spain, the US and Argentina. Investing in a small and medium-sized enterprise offers a 50% tax deduction to people with net taxable assets over €1.3m in France. The deadline to declare asset wealth is mid-June.

“We want investors who understand wine specifically,” said Patrick Ribouton, who is in charge of product diversification at a unit of asset manager La Francaise and heads a renovation project for Le Chateau La Tour de Segur that’s seeking to raise €1m online to close a €4.5m total. “We need capital and this is a source of funds to complete our round.”

Ribouton’s project, like all the other candidates for Wine-Funding, was vetted and selected for inclusion by a committee of experts assembled by Debure, including Gerard Margeon, the head sommelier of Michelin-starred French chef Alain Ducasse. They’re the ones who’ll get to taste-test the alcohol once producers start turning investor’s money into wine.

Investors in wine-making range from family inheritances to corporate giants like luxury goods maker LVMH Moet Hennessy Louis Vuitton, which owns Chateau Cheval Blanc, and insurer Axa, which controls  Chateau Pichon-Longueville.

Actors Angelina Jolie and Brad Pitt have put money into a Provence vineyard, and businessmen such as Chinese billionaire Jack Ma of Alibaba, have joined the ranks of chateau owners in recent years.

france  |  travel and leisure  |  wine  |  bonds


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