Bright Food buys French wine trader

Bright Food, one of China's largest food producers, is set to acquire 70% of the Bordeaux wine trader Diva Bordeaux, getting a foothold in the famous French wine-making region. This follows the state-owned enterprise's acquisition of 60% of shares in the UK cereal maker Weetabix from Lion Capital in a deal worth £1.2 billion ($1.8 billion) (see Interview: How Bright Food bought Weetabix).

The sale, for an undisclosed sum, was announced on June 25 and has been processed through Bright Food's subsidiary Shanghai Sugar Cigarette and Wine. Asian markets make up 60% of Diva's sales, with China, the world's biggest importer of Bordeaux wines, accounting for 45%. Previous deals have seen Chinese companies purchase vineyards, but this is the first time a major Chinese company has purchased a wine merchant.

Despite the increasing number of acquisitions Chinese companies are making in the European food and drink industry, they still face a series of challenges. “Chinese companies have difficulties in competing in an open bid process that requires decisions to be taken very fast to succeed. Their decision process is too slow,” said Guillaume Rougier-Brierre of Gide Loyrette Nouel, who advised on the acquisition of vineyard Château de Viaud in the Lalande-de-Pomerol wine growing area of Bordeaux by Chinese state-owned agricultural group COFCO in 2011.