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I'm not one naturally to side with the hugely rich and influential, but I can't help but feel a twinge of sympathy for those members of the Taittinger clan who wanted to keep the family business. Alas, they are very much in a minority and were unable to prevent the sale of Taittinger to the American investment group Starwood Capital for E2.8bn.

The French inheritance system, which requires equal distribution of assets among surviving children, might be very egalitarian, but it's a disaster for business. Taitt was only on its third generation, yet it already had an utterly unwieldy 38 board members making it, to all intents and purposes, ungovernable, and those committed to taking the Champagne forward had clearly had enough.

The writing was on the wall back in 2002, when the family had to sell 15% of its shares to their ally, the Belgian billionaire Albert Frère, as a blocking move to ward off circling American investment banks who scented waverers in the Taittinger ranks. That deal was due to run out in a year's time and the clan clearly wanted a sale sewn up on their terms before then.

The whole 'sale of the family business' saga is one that seems to repeat itself with metronomic regularity in the French drinks industry once a company reaches a certain critical mass of board members.

"It's the reason there are hardly any family-run Champagne houses left," said the head of one of Taitt's peers. "By the time you get to this stage, one third of the board want to take the money and retire, one third just want to take the dividends, but put nothing back, and one third want to run it as a business. That's why everyone sells out in the end."

The few keen family members are usually kept on for PR duty, and always make the right noises. But quoting a 'brand ambassador' or 'global representative' is not the same as knowing that the person with the name that matches the bottle is also making the decisions about its future.

The only hope is that family shareholders might somehow be able to regain control of the Champagne and wine interests. This is not beyond the realms of possibility, particularly as Starwood Capital does not seem interested in retaining that part of the business itself.

If reports in La Tribune on Wednesday suggesting that Credit Agricole was about to take over Taittinger's wine interests from Starwood with a view to selling them on to family shareholders in due course, turn out to be true, all might not be lost after all. We shall wait in hope.


Sectors: Wine

Companies: Pernod Ricard

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