French authorities have seized 10 Bordeaux vineyards owned by Chinese conglomerate Haichang Group over allegations of tax fraud. Police claim they have evidence that points to the “laundering of the proceeds of tax fraud”, and forgery. Investigators told France 2 Television that police seized estates “that were acquired fraudulently” (France 2, 2018). Haichang Group has since indicated that the company has “filed an appeal against the seizure order, which only aims to prevent any sale and does not imply any guilt.”
The company has been under investigation since 2014, after reports in the French press uncovered that the group had been named in a report by China’s National Audit Office (South China Morning Post, 2018). The South China Morning Post alleges that the report notes that the company had been granted “public money by state authorities to buy foreign technology, but had instead purchased vineyards in France.”
The Haichang Group is a private enterprise headquartered in the port city of Dalian. It engages in oil trading and transportation, as well as in real estate development and commercial tourism. According to the South China Morning Post, Haichang is the “biggest of numerous Chinese investors in France’s wine growing regions”, and has invested a total of US$64 million in the acquisition of 24 estates.
Chinese investors have become increasingly interested in France’s wine-growing regions. Over 160 estates in the Bordeaux area were acquired by Chinese investors in recent years. This accounts for a total of 3% of the region’s vineyard acreage. These investments reflect a rising demand by China’s growing middle class for French wine. This seizure of Haichang Group’s vineyards is not expected to hinder the growing Chinese appetite for investment in French vineyards.