Sat, Nov 09, 2019 - Page 9 News List

Europe’s elite wineries want Chinese to drink their own wine

By Carolynn Look  /  Bloomberg

As Beijing celebrated the 70th anniversary of the People’s Republic of China last month with a parade in Beijing, alongside the obligatory displays of tanks and nuclear missiles was a showcase of its cultural treasures. Sandwiched between elaborate floats featuring giant pandas and dancing women in local costumes was an entry from the Hui autonomous region of Ningxia adorned with grapes and wine barrels — to represent the region’s premium vineyards.

It is perhaps fitting that the country’s wineries were showcased on a day devoted to the “Great Rejuvenation of the Chinese Nation.”

Vintners are seeking to reinvent an industry plagued by its reputation for mass-produced, poor quality wine. With a US-China trade dispute fueling a slowdown in the economy, they are banking on patriotism to convince local consumers to appreciate “Made in China” wine.

From the dry, high-altitude slopes of Ningxia to the temperate, coastal hills of Shandong Province, domestic vintners have slowly been making their presence known in the wine world.

Europe’s most respected wine houses are placing their bets: The Rothschilds, whose Chauteau Lafite has long been coveted by China’s elite as a status symbol, this autumn released their first vintage produced in China.

The timing is ripe for fine China wine, proponents say, pointing to the huge potential of young, middle-class drinkers ready to be turned on to quality wine.

Demand — projected to grow to US$17.3 billion by 2021 — might also get a boost from a nationalistic trend toward local brands.

However, while the size of the consumer market makes its outlook promising, China-made wine faces an uphill battle. It has long been a punchline among locals and foreigners alike, and a few prized bottles might not be enough to transform China’s wine-growing regions into the next Napa Valley.

“The fact that it’s from China normally works against you as a fine wine because of China’s history of producing mediocre or substandard wines for a long time,” said Jeannie Cho Lee, a Korean-American Master of Wine based in Hong Kong.

Still, “the level of understanding and appreciation of wine in China has really come very far,” she said.

Chinese do savor a good wine — especially if it is from somewhere else.

Demand has boomed over the past two decades with France’s best bottles considered luxurious gifts for social and official occasions. Chinese thirst propped up European producers after the financial crisis and sparked a wave of investment in prominent French vineyards by Chinese companies.

The movement has helped turn China into the world’s second-largest wine market by value, behind the US, and the fifth-largest in terms of volume, according to IWSR Drinks Market Analysis.

The potential is huge: Julius Baer’s Wealth Report Asia last year said that China had 48 million millennial wine drinkers in 2015, with a growth rate of 25 percent annually.

Despite its reputation for weak and bland wines, Chinese bottles still make up the bulk of what is consumed in the country. However, the production has seen a noticeable decline in recent years, with domestic wine consumption expected to slump to 71.2 million cases in 2021 from 105.4 million cases in 2016, according to IWSR.

Demand is being hit as the economy slows and drinkers gravitate toward more familiar liquor, such as the fiery sorghum-based baijiu (白酒) — China’s national drink.

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