30 May, 2001

Taittinger close to repurchase

The Taittinger-family is close to purchase the champagne activities of the same name in cooperation with the bank Credit Agricole Nord-Est. Thus write several international media after some local uneasiness at the prospect of a possible Indian ownership.

Instead, now it seems that several small and big organisations get, what they prefer. French ownership of French crown jewels - amongst them Patrick Le Brun, chairman of the independent winegrowers, several of his members deliver grapes to Taittinger, and the biggest trade union in France, CGT, that organises the communists amongst the wineworkers, have expressed their shared hope, that the family Taittinger will return as owners after an intermezzo of one year in the care of the American investment fund, Starwood Capital Group.
Tradition for international influence
Others has pointed out how it may seem a bit inappropriate that a foreign owner of a big champagnehouse sis not accepted, since the main part of the income comes from exports.

The chairman of the organisation of the champagnehouses, Yves Lombard, has mentioned how the very varied history of Champagne through several hundred years has always been rich on international influences.

Last the Belgian, Paul-Francois Vranken, has managed to manouvere his group from almost nothing to a position as one amongst five key groups in Champagne in just 30 years. Today Vranken thus controls the brand that carries his own name but on top of that also Demoiselle, Heidsieck Monopole, Charles Lafitte and Pommery.

Suitable bid for Starwood
Second round of acquiring Taittinger ended thursday last week with eight bids for the champagnehouse and its wineactivities in Bordelais, the Loire Valley and California.

A spokesman of Starwood, Laurent Perpère, says to International Herald Tribune, that three factors made the bid of the family Taittinger and Crédit Agricole Nord-Est the preferred one: The price, the timing and the simplicity of the proposed contract. The bank is prepared to take over the business straight away and with all riscs. Starwood hopes to finalize the deal by the end of June.

This means that the Spanish producer of sparkling wines, Freixenet, the champagnehouse of Thienot and the investment fund CVC are out of the game.

And so is United Breweries of course. The company, which is the world's third biggest producer of alcoholic beverages, will have to do with Kingfisher beer and the rest in its portfolio. Taittinger seems to remain French for the time being.

Uneasiness over Indian bid
What was by some seen as a possibility of achieving better foothold in the Indian market, others saw as a risk for the strict and expensive French AOC-system (Appellation d'Origine Controlée).

India does not acknowledge the regional protection of names, that the CIVC (Comité Interprofessionnel du Vin de Champagne) fights tooth and nail. This is why it would be problematic with an Indian ownership of Taittinger, the president of the CIVC, Bruno Paillard, put it earlier this month according to the French newsagency, AFP.

Also the economist, Nathalie Viet, has pinpointed the importance of understanding the French AOC-system. The special rules mean amongst other things, that grapes destined for champagne production are dealt with almost entirely manually, which makes them very expensive (in 2005 the average price was approximately five euros per kilo).

As an economist, madame Viet however also eyes the interesting perspective of an easier accesss to the Indian market with its several hundred million potential customers. A perspective, that chairman Le Brun sees as well. His members - the indenpendent winegrowers - normally do not have a lot of exports, but they deliver some of their grapes to houses such as Taittinger, who has a big export. More than 60 percent of Taittinger's 4,5 million bottles per year are sold abroad. And one of the growing markets at the moment is India.

French owners often preferred
But French often prefer, that French lighthouses remain French. Last year American Pepsicos attempt to takeover French Danone sparked such immense debate and even a law to secure that certain types of companies would remain French (Danone however not one of them, that would not be possible within the EU rules). This year another Indian giant, Mittal, has tried to purchase the steel giant Arcelor, which has been met with great hostility in France. Now a spokesperson of United Breweries hints that her company lost the battle of Taittinger for political reasons.

"The resistance has been there," she says to International Herald Tribune and refers to Lakshmi Mittals attempts - so far in vain - to buy Arcelor. In which way United Breweries (UB) more specifically has been prevented from buying Taittinger, she does not excactly say apart from the information that Starwood tried to put pressure on UB to raise its bid.

Starwood bought all activities of the family Taittinger last summer mainly to get hold of its hotel chains and the luxury hotel Le Crillon in downtown Paris.

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