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| June 12th 2007 |
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| Baron Philippe de Rothschild |
by Jane Anson
The Rothschilds – Lafite and Mouton – have been legendary names in Bordeaux since the late 19th century when, within a few years of each other, branches of the family purchased neighbouring estates in Pauillac. Both remain family-owned, joined in name but entirely separate in business. Jane Anson spoke with the two about their visions.
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Shareholders of all Bordeaux property owe a debt of gratitude to Mouton Rothschild. Today, a first growth with a turnover of €187 million and a solid strategy of privately owned châteaux, international joint ventures and mid-range commercial brands, Mouton is firmly established as Bordeaux aristocracy. But in 1924, it created a scandal that changed the way the region conducted its business. Until the arrival in Pauillac of Baron Philippe – under whose stewardship the property assumed its commercial and symbolic place – all wine in the region was sold in barrels to the local négociants, who then put their name on the bottle, usually in far more prominent lettering than that of the château, to ensure the commercial upper hand.
In 1924, when he inherited a joint share in the vineyard at the age of 20, Baron Philippe believed that these merchants were undervaluing his wine, and decided to bottle the entire vineyard’s production at the estate, thus shifting the balance of power. Bottling on site meant greater cost for the producer, but also greater prestige, and the four first growths followed suit swiftly. The Baron’s cousin at Lafite put up the most resistance initially, citing long-term contracts to merchants. This established a pattern of firsts at Mouton. It was also the first château to install, in 1926, a large main cellar for barrelstoring its wines, and to commission Parisian stage designer Charles Siclis to provide dramatic lighting within, something that no self-respecting château is without today. Baron Philippe was also the first, and in fact is still one of the very few, to commission different artists to create his wine labels each year. The first, commissioned in 1924 from artist Jean Carlu, was of the symbolic ram’s head with the five arrows of the Rothschild family, while the latest, for the 2004 vintage, was created by England’s Prince Charles.
In the 1930s, long before the idea of second wines had become common, the Baron created a second wine for Mouton, and named it Cadet de Mouton. It quickly became Mouton Cadet, first a blended wine, then a branded wine, again the first of its kind in Bordeaux, and is still today one of the largest-selling French wine brands in the world, with over 12 million bottles sold each year. The property had not received first growth status in 1855, an oversight that Baron Philippe described as a “monstrous injustice” and spent his life trying to rectify. In 1973, after years of intense battling, again opposed initially by the Lafite branch of the family, Mouton was finally elevated to first growth status. Serena Sutcliffe MW, head of wine at Sotheby’s, has ascribed the elevation to the fact that “the French government and the Minister of Agriculture recognised that it had fetched the prices of the other first growths for decades, and it was making wine at the same level of quality. They decided that Mouton’s exclusion was a complete anomaly.” Today the company |
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Company Profiles |
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is run by his daughter Baroness Philippine de Rothschild, with a tripartite structure – châteaux, joint ventures and brands. The team at Mouton include Managing Director Hervé Berland; Director and Estates Winemaker Philippe Dhalluin; Technical Director Éric Tourbier; Marketing Director Xavier de Eizaguirre, who also heads the branded wines’ division Baron Philippe de Rothschild SA; and Financial Director Pierre Guinchard. The châteaux, as with all the first growths, have seen enormous rises in prices and expansion in markets. “Ten years ago, our main markets were Great Britain and the United States, while today the share of each of those has perhaps slipped a little, ” says Berland. “But new markets in Taiwan, China and India have taken their place. We are much less dependent on specific markets today; it is one of the real benefits of globalisation.”
The past few years have, however, seen an overall drop in production, although not in turnover, from 2.1 million to 1.95 million cases. This results from weaker sales in the branded wines, as the Bordeaux mid-market price point continues to lose ground internationally. Sales of Mouton Cadet in the US have reportedly dropped 300,000 cases per year since 1992. In Chile, the company has its sole brand Escudo Rojo, produced by subsidiary Baron Philippe de Rothschild Maipo Chile, which has been a success. In fact, Escudo Rojo (“red shield”, or Rothschild, in Spanish) sold about 100,000 cases in 2006, of which 12,000 were sold in the States. De Eizaguirre expects sales to reach 250,000 cases worldwide and 100,000 in the US in the next few years. To encourage this, the company signed an accord in late 2005 with North Lake Wines, a subsidiary of Constellation Wines, to become the sole importer of the Baron Philippe de Rothschild brands there.
International joint ventures have been a key part of the strategy since the formation in 1980 of Opus One in California with Robert Mondavi. In 1997, the château began working with Concha y Toro in Chile to produce Almaviva, a quality Cabernet Sauvignon-based wine, in the Maipo Valley. Both Opus One and Almaviva started as 50/50 joint ventures, 100% family-owned. For Almaviva, both partners invested $1.5million, with Concha y Toro also providing 40 hectares of vineyards. While Almaviva is still run along the same lines, the partnership with Opus One was transferred to Constellation in 2004. “We never considered anything other than continuing to work with them,” says Berland. “Why sell a treasure like Opus One? The only change is that the management became more independent. Although I do have an advisory role, they are effectively autonomous.” Opus One sells its wines directly to distributors in the US, where previously it went through the Robert Mondavi network. Off-shore, Opus One is now distributed by selected Bordeaux négociants, the first California wine to be so represented. “Joint ventures are not easy at a distance, but overseas it makes sense because the knowledge a partner can bring is important.
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