- Gaylon Lawrence Jnr, US Billionaire owner of huge agricultural landholdings, adds the largest estate in Margaux to a portfolio that also includes Heitz in Napa.
- Château Lascombes has had a long list of owners including French insurance company; Tom Barrack, the - for a time - jailed head of a US private equity company; an Irish airline entrepreneur; a British brewery; and the Russian-American father of the world's most successful premium rosé producer. None had it for more than 26 years.
- Quality has improved in recent times, but prices have not fully reflected that trend.
- Further improvement might involve a reduction in volumes of grand vin.
- And Lawrence might change the way Lascombes is distributed in the US.
Gaylon Lawrence Jnr is one of the most successful agricultural billionaires in the US. His landholding covers some 180,000 acres (72,800 ha), including one of the largest citrus estates in Florida. He also owns several regional banks. The comment about his buying-and-selling strategy was made by an unnamed Nashville businessman quoted in Agri Investor following Lawrence’s sale of 50,000 acres (20,200 ha) of Mississippi land in 2018. The question for the wine industry is whether he expects to resell his new Margaux acquisition at a healthy profit, or to keep it as part of a family wine portfolio that includes Heitz Cellars, Burgess and Stony Hill in California. Lawrence has answered this very clearly, stating that his family “looks forward to caring for Chateau Lascombes for many generations to come”, but other previous owners have made similar statements.
“Gaylon Lawrence always loved to buy low and sell high”.
When the medical insurance giant, MACSF - Mutuelle d’Assurance du Corps de Santé Français - bought the chateau in 2011 for around €200m, including €50m worth of stock, Jean-Luc Coupet of Wine Bankers, its advisor, told Les Echos that the new owners saw things “over the very long term” noting that the agreed price reflected a “very large potential for progress.”
In the event, ‘very long term’ turned out to be a dozen years, during which MACSF did a fair amount of investment in both the winery and vineyards. The undisclosed price Lawrence Wine Estates paid probably reflects this, and MACSF (which maintains a small shareholding) have certainly benefited from what is acknowledged to be a very profitable business. How large a return they made on their capital investment is less certain.
The estate’s owner over the previous decade was a group headed by the US private equity giant, Colony Capital, whose wine- and polo-loving CEO Tom Barrack was given the Légion d’Honneur by the French president for his vinous efforts in 2010. Barrack is a colourful character. The grandson of Lebanese immigrants, and a close friend of Donald Trump, Michael Jackson, Jeffery Epstein and the actor Rob Lowe, he bailed out Jackson when the singer was short of money and almost took over Miramax Films after the company was hit by the revelations of Harvey Weinstein’s sexual misbehaviour. Football fans will be interested to know that he also owned Paris St-Germain, from 2006-11 while those following California wine will note that he still has Happy Canyon Vineyards in the young Santa Barbara appellation (AVA) of… Happy Canyon.
In July 2021, he was arrested and charged with acting as an unregistered lobbyist for the United Arab Emirates and lying to the FBI and held without bail. He was acquitted November 4, 2022.
Timeline: Chateau Lascombes ownership
1926-1952: Ginestet Family
1952-1971: Alexis Lichine group
1971-1999: Bass Charrington
1999-2011: Colony Capital
2022 - : Lawrence Family
Much Needed Investment
Whatever his recent activities, Barrack and Colony Capital did a lot of good for Château Lascombes which had been sadly unloved by its previous owner, the UK brewery giant, Bass Charrington, which had bought the estate in 1971.
After acquiring the chateau for a reported €77m, as Bordeaux expert Jane Anson reported in her book, Inside Bordeaux, Colony Capital invested massively - reportedly $47m - in “vineyard expansion and in an entire renovation of the cellars, including a four-level, gravity-led vat room and cellar that [in 2020] remains one of the most modern in Bordeaux.” When MACSF bought the estate, it had been on the market for four years. A little-known fact about Lascombes is that, during that time, the late Tony Ryan (founder of Ryanair), owned a 40% share of the property. He reportedly drank it regularly and had €3m-worth of the wine in his cellar.
Curiously, given the 10-12 year ownership pattern of recent times, the chateau was very nearly sold half way through during Bass Charrington’s 20-year tenure, in 1981 - to a group of Australians led by that country’s then most famous wine authority and entrepreneur, Len Evans. The group, which already owned two smaller estates, Rahoul, in the Graves and Padouen in Barsac, had signed an agreement with Bass Charrington when Evans’s financier friend Peter Fox died after driving his Ferrari off the road. Following Fox’s death, it emerged that despite his apparent wealth, he had considerable debts. Rahoul and Padouen had to be sold and the Lascombes deal cancelled.
Prior to Lascombe’s less than starry period under Bass Charrington ownership, the estate belonged to another group headed by another mercurial wine personality and backed by a happily more solidly-rooted financier. The former was the Russian-American, Alexis Lichine, while the latter was David Rockefeller. They and their partners bought it in a run-down state from the Ginestet family, owners of Chateau Margaux who had had Lascombes in their portfolio for 26 years and given it very little love.
The Lichine group paid just $140,000 in 1952 - the equivalent of $1.5m today - and, as Anson reports, helped its reputation to ‘shoot up’, “thanks to Lichine’s tireless travelling and promotion” especially in the US.
Lichine also personally owned Château Prieuré-Lichine in Margaux, which was run by his son Sacha from 1989 until 1999 when, heavily burdened by debt, it was sold - for $29m to the French, multi-sector conglomerate, Group Ballande. Lichine Junior subsequently went off to buy Château d’Esclans in Provence and to launch Whispering Angel, that region’s most successful brand.
After the collapse of the Evans-Fox deal, Bass Charrington acknowledged the need to invest more money and effort into Lascombes and quality improved over the second decade of its ownership, but never to the level that might be expected of a second growth Margaux.
Swelling Over Time
As Lascombes’ ownership changed every decade or two, its acreage grew. In 1951 there were just 12ha - down from 17ha in 1855. In 2004, there were 50ha, in 1996, 83ha and today 120ha, making it - again, according to Anson - the biggest of all the classed growths with, extraordinarily, 12% of the whole appellation.
Inevitably, expanding vineyards tenfold has given Lascombes a far more fractured landholding than many of its neighbours. The press release announcing the purchase says “The estate vineyard is made up of the most sought-after plots in Margaux, composed of a unique mix of soil-types for this appellation: a gravelly outcrop planted with Cabernet Sauvignon and Petit Verdot, a block of clay-gravel made up of Merlot and Cabernet Sauvignon, and clay-limestone plots which produce an optimal expression of Merlot.”
Bordeaux specialists however note that the plots, spread across the communes of Margaux, Cantenac and Soussans are not all of the same quality. The finest are good enough to have supplied Chateau Margaux with some of its best grapes in the 17th century while the least good in Soussans are less obviously of second growth calibre. The quoted 120ha includes 27ha the estate has been renting from its neighbour Château Martinens, a relationship that - thanks to the way the Médoc classification works, legally elevates the grapes it harvests from them to second growth status from Cru Bourgeois.
Expanding the vineyard holdings and changing ownership have led to swings in style as well as quality. Anson notes the unusually high proportion of Merlot in the vineyards and its contribution to the wine’s “voluptuous” character and “joy and vibrancy”. There has also been generous use of new oak and crowd-pleasing winemaking reflecting the fact that Michel Rolland is a consultant.
The change wrought by Barrack and Colony Capital in 1999 is illustrated by the fact that the 1989 and 1990, produced in good vintages at the end of the Bass Charrington era, got 86 and 85 points respectively from Robert Parker. In 2010, Parker described the 2000 vintage as “the first of a succession of brilliant wines that have emerged from this previously moribund estate over the last decade” giving it 90 points. The 2010 vintage was a particular success, helping to propel the estate to 43rd on the 2011 Liv-ex Bordeaux Power 100, 27 places higher than a year earlier.
Despite this dramatic improvement in its reputation, Lascombes remains an underperformer, certainly in price terms. With a global Wine Searcher average price of $68, the 92-point 2020 is over $30 cheaper than the 94-point Rauzan Segla ($100) and less than a quarter of the 96-point Palmer ($320). Crucially, it is also lower than the prices commanded by Lawrence Wine Estates' Napa Heitz Cellar Cabernet Sauvignons (from $80-300).
Off la Place?
Raising prices depends on distributors which, until now, for Lascombes has meant the negociants trading through the virtual Place de Bordeaux. Taking the chateau off la Place completely is unlikely, especially as other non Bordeaux producers are so eagerly moving onto it. But many of those maintain their own distribution in key markets. Opus One, for example does not rely on Bordeaux merchants when selling its wine in the US. So, it is relevant that Gaylon Lawrence also owns Demeine Estates, a California-based business that was a nominee for the 2022 Wine Enthusiast Wine Star Importer of the Year award. Heitz, another arguably underperforming estate when Lawrence bought it in 2018, has a healthy DTC - Direct to Consumer - business, including wines that are exclusively available to private customers. Controlling US distribution while remaining on la Place for other markets would make sense.
Bordeaux is a conservative region, and changing the way one of its top wines is sold is not a step to be taken lightly. But given the experience they have gained over the last four years with their Californian wines, it is sure to be one Lawrence and Master Sommelier Carlton McCoy Jr, CEO of his wine business, have seriously considered.
McCoy has said that “Château Lascombes is a special place, and we will spare no expense to ensure that we bring it to its full potential” and Jane Anson, a fan of the Lascombes wines in recent times, says she is excited by what the new owners could achieve with commitment and investment. Others agree, expecting greater focus on the estate’s best vineyards, and a reduction in the amount of wine the chateau will sell as grand vin.
Gaylon Lawrence Jnr is only 60 years old and in the early stages of building a substantial fine wine business. Maybe that Nashville businessman’s comment about him liking to ‘buy low and sell high’ will refer to the cost of acquiring the chateau and the price people will happily pay for its wine. If so, perhaps the Lawrence family will, indeed, be the first owners of Lascombes since the 19th century to hold onto the estate for significantly longer than 25 years.