5 Things: Fine wines in China

By That's PRD, September 22, 2015

For this week’s 5 Things we decided to take a look at China’s rapidly developing wine industry.

Although not known internationally for its wine producing regions, China is starting to receive attention for the red wines produced in the provinces of Ningxia, Shanxi and Xinjiang.

To shed some light on all things wine in China, we spoke to Julien Gregis, Senior Sales Manager – On trade at Summergate. Summergate Fine Wines was founded in 1991 and is one of the top three importers of wine to China.

Here is what he had to say about China’s relationship with wine:

China has good wine

China makes predominantly good reds and the scene here is really improving based on the domestic Merlot and Cabernet Sauvignon. The main provinces involved in China’s wine renaissance are Ningxia, Shanxi and Xinjiang.

Traditionally in China, production of products has been more about volume than value, meaning wine here was made to supply lots of people – not for good taste.

What is very interesting about Chinese wine is that a few years ago, a number of multinational companies involved in luxury spirits have started to invest in Chinese wine. They have been working to grow wines quality and reach and supporting local producers. International alcohol suppliers are beginning to feel the trend.

For example, our company, Summergate, is starting to distribute and grow awareness on good value Chinese wine. Our latest addition, Kanaan ‘Pretty Pony’, won the ‘BEST CHINA RED’ awarded by Wine 100 in July 2015. ‘Kanaan Pretty Pony’ was also highly praised by the Master of Wine, Jancis Robinson, from the Financial Times.

Wine consumed in China is mainly domestic wine

Most of China’s wine comes from Ningxia, Shanxi, Shandong and Xinjiang; and 80 to 85 percent of the wine consumed in China comes from China. In 2014, China produced 11 million hectoliters of wine.

Beware of counterfeit wine

Counterfeit wine.

In China, wine, like many other products, is facing counterfeiting issues. For example, there are more bottles of Chateau Lafite sold in China than the winery actually produces.

The main thing to look for, when purchasing imported wine in China, is to check the back label, it will provide few information about the customs approval, importer name, etc.

Many restaurants and bars will ask importers for their importation certificates to ensure the wine they’re purchasing is what it’s labeled to be. In reality, aside from taste, it’s very difficult to identify fake wines for someone that doesn’t know the business and what to look for.

Imported wine is in high demand, despite cost

There is a big demand for imported wine, despite the fact most wine drank in China comes from China. Taxes make foreign wine expensive to buy and the whole cycle of distribution ups the cost due to the fact it’s a foreign product and a higher financial yield can be potentially made. In 2014, China has become the world’s biggest market for red wine consumption for the first time, overtaking France and Italy.

Foreign wine is more expensive

It is difficult to say exactly how much more expensive imported wine is, because it really must be looked at on a case-to-case basis. On average imported wine brands are 50 to 75 percent more expensive, although I must stress – the ratio changes greatly depending on the type of wine, brand and the channel of distribution.

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[Cover image via AFP]