High-Priced Wine Boom in China? That’s Rich, Some Say

By ABC News

Apr 11, 2014 10:07am
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(STR/AFP/Getty Images)

By Geraldine Ding

BEIJING – China is now the second-biggest consumer of high-priced wine in the world, according to a  report in the South China Morning Post. Already the world’s largest red wine consumer, drinkers in the country now trail only those in the U.S. in their willingness to spend $10 or more, which is considered expensive in China, on a bottle of wine.

Last year, China made the world sit up when it snatched the world’s top red wine consumer status from France. Wine enthusiasts in the country, where 90 percent of the wine consumed is red, put away 155 million nine-liter cases. That knocks out France’s 150 million and Italy’s 141 million.

China’s spending on expensive wines is expected to keep on growing. The figure, which surged almost 430 percent from 2008 to 2012, is expected to grow almost 60 percent by 2017.

But is this upward trajectory actually happening? Industry insiders seem to quibble.

Raphael Sarri, the head sommelier from the company 1949, a popular group of high-end restaurants and bars in Beijing, said that trade numbers on imports and sales do not necessarily reflect real consumption.

“In the past four years, annual wine sales at 1949 have remained flat,” he said.  “[We sold] an average of 1,000 bottles a year. In fact, before 2011, I used to sell at least 20 bottles of the premium wine, Bordeaux, every month. Now, it’s about 20 bottles a year. ”

Marcus Ford, the general manager of Pudao Wines, is equally cautious. He questioned whether the industry was overinflated.

“I’m a little bit skeptical about figures floating around,” Ford said. “It’s very hard to evaluate consumption in China. Most of it is anecdotal.”

“In 2006 to 2012, year-on-year growth in imports year was more than 50 percent,” Ford added. “But in 2013, imports into China was flat. There has been some over-exuberance about the trade in China, and now we’re starting to see a bit of self-correction.”

As an example of this over exuberance, Mr. Ford highlights how a few years ago, prices of Bordeaux were “overcooked to stock price levels. Prices got crazy on the back of tips that the Chinese would pay anything for wine, and when the wine came in, they realized that wasn’t the case.”

Overinflation or not, there’s a marked change in the way that Chinese are consuming wine.

“It’s a very boom-and-bust market in China,” said Ford. “But underneath this is a new grassroots culture.

“There has been a huge shift towards open-mindedness amongst Chinese consumers,” Ford added. “They want to know more about the world of wine. They no longer reserve wine for special occasions, yet they don’t buy into aggressive marketing and the idea that super-expensive means good.  Now they just care about what’s in the bottle.”

Sarri added, “The Chinese are producing more high-quality wine — at good prices.”

And Chinese consumers are snapping it up.

No longer an emerging wine market, is China well on its way to become a country of full-fledged aficionados?  In a country once known for celebrating good times by mixing wine with Coca-Cola, is the Chinese palette finally becoming sophisticated?

“Everyone asks me that,” Ford said. “But what is a Chinese palette? China is so large and diverse. And so are its consumers’ tastes.”

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