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July 17, 2006

Fine Wines of... China?


Hey, they laughed at Australia when they planted grapevines to see what would happen: now wines from down under are considered among the world's greatest.

Donald Greenlees explored the nascent Chinese wine space in an article which appeared in the New York Times on July 4; it follows.

    Working on a Dream: Fine Wines of China

    It was not an obvious place to put a vineyard. The ground was barren and stony. In winter, temperatures could drop below freezing and the wind blew cold and hard.
    In October 2000, however, Nicolas Billot-Grima decided to build a winery, far from his native Bordeaux, within sight of the Great Wall of China, 43 miles northwest of Beijing.

    ''The field was totally no man's land,'' Mr. Billot-Grima said. ''It was nothing. It was rocks. And the idea is to do something where no farmer will use this unfertile land.''

    Despite the harsh weather and terrain, Mr. Billot-Grima, whose family has produced wine for six generations in southwest France, decided he had found his terroir -- the blend of earth and climate that winemakers seek to give vintages a unique character.

    Here, he would embark on an ambitious experiment to produce wines of high quality in the French tradition. He would join a small number of winemakers trying to turn China into a respected wine producer, alongside other non-European producers like the United States, Chile, Australia and New Zealand, with the capacity to export and to meet the needs of a more demanding domestic market.

    In recent years, newly affluent Chinese professionals have been abandoning beer and potent local spirits for the refined taste and image of grape wine, in contrast to the relative decline in wine consumption in some parts of the developed world that has led to a global oversupply.

    Wine consumption in China, including Hong Kong, is forecast to grow 78 percent in the 10 years to 2009, according to a study by The International Wine and Spirit Record in London. This means Chinese wine consumption will grow more than seven times the forecast average for the rest of the world.

    By 2009, the Chinese are expected to drink 766 million bottles of wine, up from 500 million in 2004.

    With 95 percent of sales going to domestic brands like the top sellers Great Wall, Dynasty and Dragon Seal, Chinese wine production is increasing to meet the new demand. According to The Record, Chinese output is on target to grow by 50 million liters, or about 13 million gallons, to 420 million liters from 2004 to 2010.

    The increase comes as subsidized European winemakers are under pressure to cut production and reduce the so-called wine lake -- the surplus wine that often ends up being transformed into industrial alcohol.

    While wine producers in Europe are being asked to produce less and focus on quality and competitiveness, the challenge in China is to make a giant leap in standards. Most Chinese wines are barely palatable to anyone accustomed to wines from Europe and other well-established producing regions. Last November, the magazine Wine Spectator found at a tasting of typical Chinese wine that ''both reds and whites were achingly sweet, tended to be high in alcohol, and resembled vermouth or sherry, with flavors of raisins, toasted nuts, orange peel and hard candy.''

    But a new breed of winemaker in China, backed by foreign investment and technical advice, is trying to change that reputation. The aim is to keep pace with the evolving tastes of more widely traveled and sophisticated Chinese and to compete with other wine-producing nations, which see China as a rising and potentially huge market.

    ''As the market is opening to international wines, there is a real concern by the Chinese wineries to increase the quality of their wines to make them more competitive with international tastes,'' said Dominique Hériard Dubreuil, chairwoman of Rémy Cointreau, which owns 24 percent of Dynasty Wines in Tianjin, China.

    Some winemakers in China are dreaming of the day when Chinese wine might be of export quality in a world market where imports account for an increasing share of consumption, even in wine-producing nations.

    In his five-year-old vineyard in Hebei Province, 600 meters, or 2,000 feet, above sea level, Mr. Billot-Grima has made a start on that ambition in what he named Château Tayshi. He planted his imported French vines in May 2001 on 50 acres. The red wines would blend merlot, cabernet sauvignon and cabernet franc; the white wines would be chardonnay and sauvignon blanc.

    It was not an easy beginning. Chinese customs officials held the imported vines in quarantine for two months. Then, his farmers objected when he wanted to cut the first grapes and let them rot on the ground to improve the soil. But by 2004, Mr. Billot-Grima had produced his first wine -- a chardonnay.

    ''It was amazing,'' he said. ''All of us were surprised by the quality.''

    A certain amount of French prestige has been riding on his success. He established Château Tayshi with his Hong Kong business partner, Bosco Wang, after winning a French government contract to build a winery as a ''demonstration project.'' The venture's goal was to help nurture the Chinese wine industry's effort to achieve high quality. Because it is a demonstration project, Château Tayshi's production is likely to peak at about 150,000 bottles a year.

    ''We don't want to be big,'' Mr. Billot-Grima said. ''We only want to produce quality wine.'' But he added: ''We are thinking about export. I am sure we will export to Japan and America.''

    At a wine and spirits show, Vinexpo, held in Hong Kong in May, six Chinese winemakers set up stands alongside the finest European and other producers, signaling their aim to compete. Industry experts estimate that of about 400 wineries in China, a quarter have some hope of achieving good quality.

    One of those to exhibit was Grace Vineyard, which was established in 1997 by a Hong Kong businessman, Chan Chun-keung. The 200-acre winery is in Shanxi Province in northern China.

    ''One day we hope people will try our wine and say this is great Chinese wine, like people speak of a great French or Australian wine,'' said Judy Leissner, the 28-year-old chief executive and daughter of the winery's founder.

    Yet, before wine producers elsewhere start to tremble at the prospect of China's flooding the already saturated global markets with inexpensive wine of reasonable quality, winemakers concede that China is still a long way from being internationally competitive. Furthermore, the size and growth potential of the Chinese market are likely to keep Chinese wine producers busy at home. Many of those producers are importing low-cost wine in bulk and rebottling it to make up for a domestic shortfall.


FunFact: China is currently the world's sixth-biggest wine producer.

More where that came from here.

July 17, 2006 at 10:01 AM | Permalink


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