Last week I again wrote about the shock sale of Klein Constantia in the Sunday Times, a story that shot up on the charts on winenews as well.
Two decades ago Gerald Ratner was the world’s largest jeweler, operating 2500 shops. Yet two jokes told at a public dinner killed his business: some of his earrings were “cheaper than a prawn sandwich” and one of his products “was total crap.” For his jokes were reported by UK tabloids and hard-pressed consumers did not share his millionaire sense of humour and £500 million was quickly wiped off the market value of his company.
Which could explain why that other London jeweler, Laurence Graff, played hide-and-seek earlier this year with De Telegraaf gossip columnist Willem Kool at Graff’s palatial Delaire estate high above the Banghoek Valley. No interview appeared.
Ratner went for psychiatric help for his bad case of foot in mouth but soon gave up the pills for cycling. He now rides 40Km a day and set up a chain of health clubs in the process which he sold for £4 million in 2001.
Confirming that bicycles are great vehicles for business deals, as the sale last month of Klein Constantia estate to two foreign cyclists on the Cape Argus, confirms. Wine snobs and royalists will be pleased to learn that one of them, Charles Harman, was until recently head of UK investment banking at JP Morgan Cazenove and Cazenove are stockbrokers to the Queen.
The other, Zdeněk Bakala, is a Czech-born coal and iron billionaire. Since our own homegrown coal billionaire turned wine farmer, Graham Beck, passed away last year, there is pleasing continuity in this purchase. After all, coal is just compressed vegetation on its way to becoming diamonds for Mr. Graff to sell – renewable resources becoming non-renewable ones.
The sale shook-up the spittoon with FNB MD Michael Jordaan (a sleeping partner at Banghoek estate Bartinney) tweeting what was on everyone’s mind: “price?” Klein Constantia MD Lowell Jooste e-mailed “we decided to keep the sale price as a private matter but can confirm that KC had no borrowings.” Sleuthing has unearthed a “best guess” price of R220 million for 82ha of vineyards on an historic 146ha estate.
This figure probably includes a fair amount of unsold stock and there are probably a couple of residential stands near the road that can be excised to reduce the price by a couple of bar. But it looks like our bicycle bankers paid something approaching R2.5 million per hectare of vineyard.
So no fire sale this and a welcome boost of confidence in the whole SA wine industry, even if one high profile wine marketer told Die Burger that buying wine farms in Stellenbosch and Constantia did not make financial sense.
If KC vineyards are worth R2.5 bar a hectare, then how much for Groot (called Groote in Wine Spectator magazine) Constantia, an estate so popular with the 200 000 annual Chinese visitors, the tasting room is nicknamed Beijing Central Station. As prices of Château Lafite on auction in Hong Kong prove on a regular basis, the market for icons of western wine lies in the east. Perhaps Pam Golding should pack for Peking.