THE GINESTET CASE STUDY.
INTERNATIONALISATION AS A WAY TO
RENEW BORDEAUX WINE ECONOMY’S
ENTREPRISE SPIRIT
(1978-2000)
Christian Delpeuch,
chief executive officer of Ginestet, Bordeaux,
& Hubert Bonin,
professor in contemporary economic history at Bordeaux
Political Sciences Institute
The Bordeaux wine economy endured a grave crisis
at the beginning of the last quarter of the 20th century: most of its familial trade houses were submerged
by losses and failed down. The renewal of bordeaux wine economy was due to new forms
of capitalistic and commercial strategies. Large French financial groups (Suez, Paribas) linked to
investment banks, or foreign French and alcohol and spirits groups (Bols, Seagram, Pernod-Ricard,
Rémy-Cointreau) or wholesale traders (John Holt) took hold of Bordeaux wine houses. But this
trend was brought to a halt at the very end of the century: specialists in wines and alcohols more
and more prevailed. Multiregional wine sellers constituted groups which developed all over France
dynamic policies to rebuild commercial networks. Whereas their strategy turned towards the internal
mass market doesn’t matter here, their involvement in the reshaping of an international network
and trademark will be the core of that case study. Whilst waiting for a large synthesis about Bordeaux
trade at the end of the century1, we’ll concentrate our attention on a middle-size company, Ginestet,
as a testimony about the requirements of internationalisation but too about its very usefulness for
the renewal of business.
1. Ginestet from a halted strategy to renewal
Since its foundation in 1897 by Fernand Ginestet2, the wine trade house Ginestet had been a wellknown
brand-name and merchant house for a long time in Bordeaux, about one of the fifteen more
important there, with 70 % of its turnover (34 millions francs in 1975) through exports. The
Ginestet family had reached some high level within Bordeaux society; it played a key part in several
professional institutions, and it had constituted too a solid patrimony through the purchase of
several renowned vineyards: Cos d’Estournel in 1917 and Château Margaux (in several steps
between 1934 and 1947)3. But, after the so long guidance of the patriarch Fernand Ginestet in
1953, under the second and third generations’ management, the company failed to match the
rebuilding of selling forces all over France and Europe in the 1960s-1970s: it lacked contacts with
the new forms of ‘modern retailing’, that is self-service markets (hyper- and super-markets chains
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and their centralised purchasing entities), whilst losing efficiency on traditional outlets, wholesale
wine and alcohols traders abroad. Like many bordeaux wine trade houses thus, it lost ground in
front of competition.
Moreover a speculation crisis that burst out in Bordeaux in 1973-1974 shook several companies
which were financially burnt out by wine overstockpiling and discrepancies between high tariffs at
buying and the fall down of trading prices… After a deficit of 20 millions francs in 1973-1975, its
total debt rose to 67 millions francs4 in 1976; a terrible crisis shook Ginestet in 1976-1977. As
bankers showed hard pressures, the Ginestets had to sell Château Margaux, a most famous vineyard
and grand cru (for 72 millions francs!) which it had bought in 1920. The second (Pierre Ginestet,
born in 1900 – whilst Jean-François, Pierre’s elder, died in 1974) and the third (Bernard Ginestet,
born in 1936) generations of the Ginestet family were thus deprived of the company.
Ginestet itself had to find a new way of capitalistic life in order to resume its resiliency. After
several events, it was therefore aggregated in 1978 to a large wine group, “Groupe Bernard Taillan”.
That one, under the guidance of Jacques Merlaut and Antoine Merlaut, manages wine affairs not
only in Gironde, but too in the Rhône Valley and Languedoc (La Compagnie rhodanienne) and the
Loire Valley (Joseph Verdier). Its international scope is proven through some aspects: Joseph Verdier
finds 29 % of its turnover through exports, La Compagnie rhodanienne 17 %. The objective is of
course, like in any other wine and alcohol group, to provide the commercial network with a broader
range of wines, either coming from France or gathered on foreign areas. Subsidiaries and commercial
entities have been set up in Japan, in China, in SouthEast Asia and in North America, and assume
a group function of promoting the group’s whole range of wines.
2. The successful reshaping of a wine trade house
Within that strategy, the Ginestet company itself has been submitted to a whole rebuilding – and
its headquarters themselves left Bordeaux to the outskirts, at Carignan-de-Bordeaux. Its commercial
force has been shaped up in order to enlarge outlets: networks have been warmed up through an
active commercial policy; the range of products and brands has been considerably propped up – and
these efforts were intensified especially under the management of a new chief executive officer since
1990, Christian Delpeuch.
First the main trademark itself, “Ginestet”, has been revitalised, through a reshaping of the aspect
of the bottle stickers, and moreover through the enlargement of the range of “generic wines”, that
is wines gathered from various bordeaux vineyards and mixed altogether with subtetly (“assemblage”
or wine vintages blending). In fact bordeaux wines have been traditionally sold under the brands of
the producers themselves (for grands crus or middle range wines) or along brand names belonging
to wholesale trade houses, like Ginestet, Dourthe or Calvet. The renewal and enlargement of
Ginestet generic wines has been the key target in the 1990s (Marquis de Chasse, Grand Marquis,
Bordeaux de Ginestet, Ginestet, G of Ginestet, Collection d’Autrefois, La Taste, Anthologie, etc.). A mix
of commercial creativity, of wine quality and of an imaginative marketing allowed these generic
wines to conquer their market shares either within France or abroad – and they supplied one third
of Ginestet’s turnover in 1999.
Particularly since 1992, the quest for quality has been posed as a priority all over the bordeaux
wine community in order to resist Californian, Spanish, Italian, South American and Australian
growing competition since one or two decades for middle-range wines, bought and drunk for common
events – whilst grands crus are more and more dedicated to exceptional events or high class consumers.
Ginestet participated therefore to that common struggle to promote higher quality among
middle-range wines and all the more a more stable high quality as a lot of wines of that type had been
CHRISTIAN DELPEUCH & HUBERT BONIN
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proposed to consumers by local châteaux (in fact middle-range wine producers as any vineyard can
adopt a château name linked with its family name…) without a guarantee of pluriannual stability.
Ginestet has reinforced then its vinification tools – with a “chai d’élevage” (wine storehouse
intended to get wine mature) rich with 5 000 barrels at Carignan-de-Bordeaux. It has even concluded
contracts with several dozens wine producers in order to provide them with advice all along
the grape growth process and of course the first wine treatments, in order to get from ahead wines
of stable quality to be managed afterwards by Ginestet’s wine storehouses; more than half of any
generic wines gathered by the latter came now from vineyards covered by that large umbrella of quality
from the vine culture up to the wine vats.
In the meanwhile Ginestet has been more and more involved with the world of well known bordeaux
wines as the Taillan group purchased several high-range vineyards: besides Cos d’Estournel (a
saint-estèphe), already included within Ginestet’s control, Gruaud-Larose (a saint-julien), Chasse-
Spleen (a moulis cru bourgeois), Haut Bages Libéral (a pauillac cru classé), Ferrière (a margaux cru
classé), La Gurgue (a margaux cru bourgeois) and Citran (a haut-médoc cru bourgeois) have been
added all along the recent years. This helped Ginestet’s commercial forces to enlarge their ranges,
which encompassed either generic wines or high level crus; their notoriety boosted Ginestet’s own
reputation and that of its less high range wines.
3. Internationalisation as a target and a consequence
Owing to that two-fold strategy – quality policy and generic wines in order to promote the Ginestet
brand; high level crus –, any market segment could thus be prospected. Every kind of commercial and
profit margins could be raised, which allowed to amortise the commercial networks and to produce
cash flow. Any retail or wholesale distribution circuit could be reached, like any level of consuming purchase
power in a lot of countries. The internationalised target was in fact to get access to every level of
consuming purchase-power: middle classes paying about five to ten euros for a generic wine; upper
classes investing much more money either to sociability events or to enrich their wine cellar, in developed
countries (United States, Western Europe, Japan) or in emerging countries in Asia or elsewhere.
These efforts led to the renewal of the Bordeaux tradition most trade houses had entertained:
internationalisation absorbed 42 % of Ginestet group’s turnover in 1999. But the Ginestet group
has developed too a strategy of spreading its quality policy abroad: it took control of eight vineyards:
one in Bulgaria, Morocco, Chile, Australia and Egypt, two in Spain, three in South Africa. An internationalised
competition has led to the emergence of these countries (and some others: Italy,
Hungary, California, etc.) on the world wine market. Would Ginestet company remain in touch
with consumers’ mood and commercial trends, it had to insert into its products’ range these non-
French wines. Pernod-Ricard and La Baronnie-Rothschild, two large French wine trade houses, had
paved the way to such a strategy – along the same way as cognac and champagne trade houses had
to distribute whisky and gin too… Internationalisation imposed in fact to respect international consuming
moves and moods – even tastes as some generic wines which are being set up in Bordeaux
have to submit to Anglo-Saxons fashions towards some kinds of wines.
Conclusion
The case of that middle-sized wine company, Ginestet (with a turnover of only 600 millions francs
in 1999 – less than one hundred euros – instead of 484 millions in 1995), provides thus a case study
of the deep changes of internationalisation strategies among Bordeaux wine trade houses. Whilst it
THE GINESTET CASE STUDY. INTERNATIONALISATION AS A WAY TO RENEW BORDEAUX WINE ECONOMY’S ENTREPRISE SPIRIT (1978-2000)
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can’t bear comparison with the giant alcohol world houses (both British companies: Diageo, Allied-
Domecq; both French ones: Pernod-Ricard, LVMH5, etc.), it can in fact resist them – like some
other Bordeaux wine and alcohols houses like CVBG, Calvet, William Pitters, Yvon Mau, La
Baronnie, Marie Brizard6 – owing to a three fold international strategy convinced with the necessity
of luring any bourgeoisie’s’ group: upper classes and middle classes, through any commercial circuits
(wine shops, restaurants and wine-coffees, mass distribution), with any kind of wines (crus,
generic French middle wine, foreign wines). Each of these Bordeaux houses reached a turnover of
somehow 500 millions to one billion francs at the end of the 20th century and contributed to the
renewal of Bordeaux capitalism’s strength and competitivity after some disorder and hesitation in
the 1960s-1970s.
Internationalisation plays more and more a key part to spur bordeaux wine-traders (and winegrowers)
to reach better and more stable qualities: it compels firms to dive into competition, and
this competition is growing faster and faster on international markets. Although competition already
had been strong for decades, bordeaux grands crus were not easily equalled and still remain
unequalled… But middle range wines and low-middle range wines are submitted to a more and
more terrible competition even in terms of quality – if not tastes. This explains the utility of internationalisation
as a way to keep awakened to that reality, to avoid the drift towards market-shares
loses and to sustain fighting spirit. These middle-sized trade houses do keep resiliency and reactivity
to markets trends and can thus adapt their products and methods somehow quickly - but privileged
advantages are no more possible as even a well-known trademark, like Ginestet, could be questioned
in a while!7
NOTES
1. Some researches are being under course, especially by a geograph and and economist.
2. Fernand Ginestet (1871-1953) was a self made man who had begun its career as an employee by a wine trade house in Bordeaux
in 1885, at the age of 14. His own trade house had untertaken several other ones in the following decades. It got associated with
another one, Latrille, in 1915, into a common subsidiary, Ginestet & Latrille, specialised in North Western European and British
markets.
3. Cf. Bernard Ginestet, 1897-1997, Ginestet, éditions William Blake & Co, Bordeaux, 1997. This short book is not a real business
history research but rather a novelised story, but it is worth with documents and facts and thus most interesting.
4. We used a file of Société bordelaise de CIC’s archives about Ginestet ; that former was the main banker of the company, ahead
of BNP and Crédit agricole. See H. Bonin, La Société bordelaise de CIC, 1881-1991, éditions L’Horizon chimérique, Bordeaux,
1991. Most of the debt came from the financing of piled up wines (owing to warrant credits).
5. Moët Hennessy-Louis Vuitton or LVMH controls champagnes Moët & Chandon, cognacs (Hennessy, Hine) ; and the group
or sometimes its president himself owns some grands crus (Château Latour, Château Yquem).
6. Cf. Hubert Bonin, Marie Brizard, 1755-1995, éditions L’Horizon chimérique, Bordeaux, 1995.
7. That text has been written in common with Christian Delpeuch and Pr. Hubert Bonin – who is preparing a large study about
the institution gathering any professionals of bordeaux wine economy, the Centre interprofessionnel des vins de Bordeaux (C.I.V.B.) ;
Ginestet company has provided documents about its past and recent evolution.
CHRISTIAN DELPEUCH & HUBERT BONIN