Winery’s Revival Makes Japanese Heroes in France

Kenji Suzuta wore a face of grave concentration as he poured vintage 1983 Chateau Lagrange into his glass, sniffed it, let it trickle gently into his mouth and swished the wine across his tongue.

Suddenly grimacing, Suzuta leaned over and spit the ruby-colored sample of grand cru into a sink, leaving an unsophisticated visitor wondering whether to do likewise or to swallow.

“It’s not bad,” Suzuta observed with detachment. “Very round and mellow but not a great wine.”

Suzuta should know. When the French government barred his employer, Suntory of Japan, from buying a minor Bordeaux vineyard 16 years ago for “cultural” reasons, the distillery dispatched Suzuta to the University of Bordeaux to study enology--the science of making wine.

And when Suntory finally managed to get permission to invest in Bordeaux, acquiring the dilapidated Chateau Lagrange in late 1983, Suzuta returned with a mission. Suntory, the world’s third-largest beverage company, vowed to spend whatever necessary to rehabilitate this once-dignified winery and restore a tradition of quality that had withered on the vine during half a century of neglect.

The Japanese had their work cut out for them, as Suzuta suggested in his strained wine tasting. He was sampling the final vintage bottled by the estate’s previous owners, the Spanish Cendoya family.

Chateau Lagrange, with 388 acres of prime grape-growing soil in the heart of the Medoc region, was a shambles in 1983. Although it had been designated a third-class grand cru (great wine) in 1855, one of the highest distinctions in French viticulture, the Cendoyas allowed it to deteriorate so badly that the label became an embarrassment to neighboring chatelains.

This time, the Japanese were welcomed rather than treated with suspicion. After two years of delicate negotiations--aided by the proprietor of a nearby chateau who runs a side business in real estate--Suntory bought the place at a fire-sale price of 54 million francs, slightly less than $10 million at current exchange rates.

Suntory promised the French government that it would fix things up. It rapidly pumped $27 million into reconstruction: replanting and expanding cultivation of prestigious cabernet sauvignon grapes and installing computerized fermentation equipment and new oak aging casks. The company hired a team of French experts to run operations, including local wine guru Emile Peynaud, Suzuta’s former professor at Bordeaux University’s Institute of Enology.

The result was a success story--and perhaps a model for the kind of offshore investment that would suggest that Japanese are uncultured, economic animals.

Suntory is the “savior of Lagrange,” declared Clive Coates, a British wine critic.

“The Suntory takeover and subsequent renovation of Chateau Lagrange has been done with tact, taste and intelligence,” Coates wrote in his monthly publication, The Vine. “And the resulting transformation in the wine’s quality has been swift and dramatic.”

Suntory’s foray into Bordeaux was followed by a boom in vineyard acquisitions by other Japanese concerns, which in turn triggered a renewed shudder of French enological xenophobia. In 1987 and 1988, five wine chateaus were snapped up by five separate Japanese food and real estate companies.

When Takashimaya, a major Japanese department store chain, tried in 1988 to acquire a one-third ownership in the wine merchant that held the exclusive rights to distribute Romanee Conti, the renowned Burgundy label, French authorities once again intervened.

Agriculture Minister Henri Nallet vetoed the transaction, arguing that Romanee Conti was literally a work of art, part of the French cultural heritage, “comme une cathedrale.”

Never mind that Romanee Conti, the actual vineyard, was not for sale. Takashimaya had to settle for a 19.9% share of Societe Leroy, the distributor, staying below the 20% equity limit that the government sets for foreign acquisitions without its prior approval. (The rule applies only to buyers from outside the European Community.)

After convincing officials that it had no desire to raid France’s cellars of rare wines or force the venerable vineyard into mass production, Takashimaya received permission last December to register an additional 13.4% stake in Leroy, which it had already secured quietly through an intermediary in Luxembourg.

Takashimaya spokesman Hirofumi Hisasue said the linkup is aimed at “widening the pipeline” of other French wines on Leroy’s list. The Japanese will continue to bring home only about 10% of Romanee Conti’s limited production, which has unrivaled snob appeal in Tokyo’s fashionable bars and restaurants.

“We Japanese hardly know anything about wine, so names like Lafite-Rothschild or Romanee Conti are always safe to ask for,” said Hideo Hato, a commercial attache at the Japanese Embassy in Paris. “I think the French were afraid that it doesn’t matter what it tastes like; wine would sell in Japan just with a Romanee Conti label.”

Japanese may be world-class whiskey and beer drinkers, but their annual per-capita consumption of wine is only about 0.9 liters, or slightly more than one bottle. That is a fraction of the 70 liters of wine that the average French person drinks each year, and less than a tenth of what Americans consume.

Yet there are signs of budding pretensions among Japanese wine drinkers. Japan imported about 400,000 cases of Beaujolais Nouveau last year, for example, taking advantage of its position on the edge of the international dateline to become the first place on Earth to uncork the stuff on Nov. 16.

The ritual of the Beaujolais embargo has caught on big over the past four years, largely because of promotional hype by airline companies that fly in the raw, fruity wine.

Western-style wine bars are no longer unusual in Tokyo and other big Japanese cities. Ambitious wine lists can be found at relatively common restaurants. And vineyards dot the landscape, including four planted by Osaka-based Suntory, which also operates two “sommelier schools” to educate connoisseurs.

Indeed, although Suntory is most famous for its somewhat quirky and astringent whiskey of the same name, it got its start in wine at the turn of the century. Founder Shinjiro Torii, who earned the nickname “the nose of Osaka” for his olfactory gifts, concocted a home-grown product called Akadama, or “Red Dot.” The sweet, perfumed red wine remains a big seller at home and in the United States.

Even Suzuta, 46, the Bordeaux-trained enologist, confesses that he occasionally nips a little low-brow Akadama before going to bed on a cold winter night.

“Elderly people like to drink it for medicinal purposes,” he said. “It’s got stubborn popularity.”

Suzuta became most animated, however, discussing the merits of Chateau Lagrange’s recent vintages. In the words of his mentor, Bordeaux University’s Peynaud--who was retained as a consultant to the vineyard--the 1986 wine has “a very strong backbone, heady, full, complete, almost thick, with plenty of sap.”

Peynaud proclaims in a company handout: “The tasting of this wine serves to confirm the exceptional character of the 1986 vintage and the superb success of Chateau Lagrange.”

The price fetched by the bottled wine has increased along with the general consensus that it is regaining its former glory, yet Suntory does not expect to earn a sou in profit on its investment for another 15 years.

For the time being, it is reveling in the prestige of its grand cru. Chairman Keizo Saji, son of founder Torii, uses the 18th-Century Louis XVI-style chateau (remodeled at a cost of $4.5 million) as his personal vacation retreat for two weekends each year.

“Bordeaux is the world’s Mecca of wine, and for years it was a dream of Mr. Saji to come here to make wine,” Suzuta said. “We also wanted to raise Suntory’s image by associating ourselves with a great chateau. Rather than direct profits, we’re thinking of the big picture.”

Notorious at home for its aggressive distribution tactics, Suntory has opted to tread softly in Bordeaux, entrusting the merchandising of Chateau Lagrange’s entire output to local wholesalers.

Suntory obtains its share of the wine--typically about 10% goes to Japan--by lining up with other buyers. That way more money spills into the local economy, keeping everybody happy. It also means that a Japanese consumer pays about $45 for a bottle of the 1985 Chateau Lagrange, which costs about half that in France.

Suntory’s chateau-shopping days are not over. Last year, it bought a 40% stake in Garantie Mutuelle Fonction (GMF), a company that owns two neighboring wineries in Medoc--Chateau Beychevel and Chateau Beaumont--as well as Chateau Bligney in Bordeaux’s Cote d’Or region.

Also in 1989, a deal went through for Suntory to acquire 96.2% of Royer, a cognac maker in Jarnac. That transaction was purportedly held up several years by the French government in an effort to apply pressure on Japan to cut the steep taxes it levied on imported wines and spirits.

Land prices in Bordeaux, meanwhile, have increased five-fold over the past six years. Although many chateaus in the area are foreign-owned--mostly by Britons or Europeans--it is becoming increasingly difficult to buy the better vineyards, Suzuta said.

“A grand cru would be almost impossible to buy, unless you were from an EC (European Community) country,” he said. Yet further acquisitions are in the works, he added. These will be made in the name of Suntory’s Chateau Lagrange “French subsidiary.”