Mon, Dec 30, 2002 page11

• Yuppies in China discovering a taste for red wine

  • AFP
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  Champagne has yet to tickle the taste buds of many Chinese, but red wine has become a favorite on restaurant tables for the country's wealthy elite and demand is soaring.

  An explosion in local production, with sales multiplying fivefold in 10 years, and strong growth in imports are lining the pockets of vineyard owners and distributors of foreign brands.

  

  A store clerk checks inventory along an aisle stocking domestically produced wine in Beijing yesterday. While champagne has yet to tickle the taste buds of many Chinese, red wine has become a favorite on restaurant tables.

  PHOTO: AFP

  While individual consumption of wine is still just 0.2 liters per annum, compared to a world average of 7 liters, the size of China's population has lifted the country into the top 20 consumers of Cabernet, Merlot and Gamay.

  China's new yuppies have no qualms about asking for a quality wine in a restaurant, even to accompany Chinese cuisine, nor to buy a decent imported bottle for special occasions.

  The traditional Chinese greeting of "Hello, you ate?" could soon be joined by "You have drunk well?"

  "The Chinese are earning more and more money and can increasingly treat themselves to wine, like the foreigners," said Of Yun-ling, marketing director for Dynasty, one of China's top three wine producers.

  Nan Jianjun, an adviser to the chairman of wine producer Great Wall, said health, not just wealth, has helped Chinese wine consumption rocket.

  "More and more Chinese think that red wine is good for their health, so they drink more and more of it," he said.

  Whether for pleasure, curiosity or to maintain their arteries, bottles are flying off shelves to the glee of distributors.

  "The Chinese market is only the size of Taiwan or South Korea, but the prospects are enormous," said Don St. Pierre, president of ASC, one of the two largest importers and wine distributors in China.

  "In certain luxury hotels in Shanghai, for example, 70 percent of the consumers of good, rather expensive bottles are Chinese," said St. Pierre, whose company posted a 45-percent rise in sales in the last 12 months.

  Ethan Perk, China sales and marketing director at Montrose, the nation's other large foreign wine distribution company, shares St. Pierre's optimism.

  "It is certainly not an easy market but it is legitimate to believe in it. In 20 years, it will be an immense market," he said.

  "In one of our shops in Beijing, half of our customers are already Chinese," added Perk, who estimates the number of Chinese quaffers at more than 100 million.

  "Not so long ago, we ran 80 percent of our wines in the large hotels. Today 65 percent go to Chinese restaurants," he said.

  The phenomenon is not limited to Beijing and Shanghai, where purchasing power is high.

  Wine consumption has also taken hold in the provinces, according to local producers, who said passion for the tipple was on the rise in the average city.

  While importers are glad of the business, they are also wary that unscrupulous operators are cashing in on wine's new-found popularity.

  With would-be capitalists wanting a piece of the action, quality is already suffering.

  China's rural heartland is not known as a grape-friendly region and local wines often amount to little more than a mix of cheap foreign brands.

  But since China's entry to the WTO, customs rates on imported wine have fallen, making it possible for a punter to purchase a decent bottle for 50 yuan (US$6) and more top-end brands for less than 100 yuan.

  Providing the government doesn't hike taxes to compensate, Chinese consumers could see the price fall even further after China announced it was slashing the average import tariff rate to 11 percent from 12 percent beginning Jan. 1.
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