Vintners approach fickle Chinese market with caution

Mainland China's wine imports have soared more than ten-fold in the past few years but foreign producers hoping to cash in on the boom are warning the market is fickle and not for the faint of heart.

Mainland China is on track to import 10 million cases of wine this year, up from 840,000 in 2004, according to the Hong Kong Trade Development Council (HKTDC), which did not provide separate figures for Hong Kong's imports.

Asian wine consumption, excluding Japan, is expected to double from this year to 27 billion US dollars in 2017, the council said, with much of that growth driven by cash-rich China.

In another sign of the growth of the market, last week's Hong Kong International Wine and Spirits Fair, the second such annual event, attracted 520 exhibitors from 34 countries -- double last year's number.

"Many people are shocked by the speed of the growth," said Raymond Yip, the HKTDC's assistant director. "But there is a lot of pent-up demand for wine."

The disposable income of an emerging Chinese middle class has grown and many of its members are choosing wine as a healthier alternative to spirits, Yip said.

"People are getting more health conscious and all of a sudden wine has become fashionable," he added.

But Raymond Signorello, proprietor of Signorello Vineyards in California's Napa Valley, said he has been struggling to find the right agent to market his premium reds on the mainland.

"It's kind of a gold rush," he told AFP from his booth at the fair.

"There are a whole pile of Johnny-come-lately types who want to make a quick buck."

"It's not as easy as everyone thinks," said Danny Kwok, whose firm Syba (China) imports Spanish wine for the Hong Kong market.

"China is still a developing country and it's hard to establish stable laws and regulations for wines."

Hong Kong and mainland Chinese officials announced last week they had reached a deal on improving customs procedures to ease the flow of wine to the mainland.

Still, producers have complained about a host of questionable activities by Chinese officials, including double taxation on imports, Kwok said.

Brendan O'Toole, managing partner of Hong Kong-based wine exporter Summergate, said the business environment for wineries selling to China was improving, but only slowly.

"Ten years ago, there were a lot of people who would have viewed it as a bit of the Wild West," O'Toole said.

"There was a lot of misbehaviour, speculators and rogues at all levels. There's more structure and things are more transparent now, but commerce bribery is still quite widespread -- there is significant corruption."

Another challenge, Signorello said, is appealing to a market in its infancy, which tends to focus on the best-known, old world wine regions.

The winery owner said he had seen blind taste tests where a Chinese drinker chose a California red as his favourite. But, "then they turn around and buy Bordeaux," he added.

Some wealthy mainland and Hong Kong drinkers are also turning to wine as an investment after wild swings in the stock markets and property markets.

Last month, auction house giants Sotheby's and Christie's both said Hong Kong was overtaking New York and London as the world's largest market for rare vintages.

At Sotheby's Hong Kong wine sale in October, mainland Chinese buyers accounted for more than a third of buyers, up from 10 percent at a sale just a few months earlier.

The auction results came as Hong Kong tries to position itself as a regional wine-trading hub.

Lack of storage facilities and few well-trained wine professionals are among the challenges ahead for the southern Chinese city, fair attendees said.

Hong Kong's ambition may outstrip its ability to be the dominant way station for wines flowing into China, Summergate's O'Toole said.

"As a fine wine hub, it's a realistic ambition, but beyond that, getting into the big volume market, the jury is definitely still out," he said.

However, there is little question that Hong Kong will ride the wave of what promises to be a "very large" Chinese market, O'Toole added.

"It is already a substantial market and it's going to get a hell of a lot bigger."

News
Young Winstone: His ‘tough-guy’ image is a misconception
people
Sport
Adnan Januzaj and Gareth Bale
footballManchester United set to loan out Januzaj to make room for Bale - if a move for the Welshman firms up
Arts and Entertainment
British actor Idris Elba is also a DJ and rapper who played Ibiza last summer
filmIdris Elba responds to James Bond rumours on Twitter
Arts and Entertainment
Ellie Levenson’s The Election book demystifies politics for children
bookNew children's book primes the next generation for politics
PROMOTED VIDEO
Life and Style
ebookNow available in paperback
ebooks
ebookPart of The Independent’s new eBook series The Great Composers
Sport
Wayne Rooney warms up ahead of the English Premier League football match between Tottenham Hotspur and Manchester United at White Hart Lane
football
News
Outspoken: Alexander Fury, John Rentoul, Ellen E Jones and Katy Guest
newsFrom the Scottish referendum to the Ice Bucket Challenge, our writers voice their opinions
Arts and Entertainment
Lena Headey as Cersei Lannister in Game of Thrones
film
News
i100
Sport
Yaya Sanogo, Mats Hummels, Troy Deeney and Adnan Januzaj
footballMost Premier League sides are after a striker, but here's a full run down of the ins and outs that could happen over the next month
News
Nigel Farage celebrates with a pint after early local election results in the Hoy and Helmet pub in South Benfleet in Essex
peopleHe has shaped British politics 'for good or ill'
Sport
Tim Sherwood raises his hand after the 1-0 victory over Stoke
footballFormer Tottenham boss leads list of candidates to replace Neil Warnock
Voices
Strictly Come Dancing was watched by 6.9m viewers
voicesIt has been hard to form generally accepted cultural standards since the middle of the 19th century – and the disintegration is only going to accelerate, says DJ Taylor
Arts and Entertainment
Roffey says: 'All of us carry shame and taboo around about our sexuality. But I was determined not to let shame stop me writing my memoir.'
books
News
Danielle George is both science professor and presenter
people
News
i100
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Food & Drink

    Recruitment Genius: Accounts Administrator

    £16000 - £18000 per annum: Recruitment Genius: This is an exciting opportunity...

    Recruitment Genius: Personal Trainer / PT - OTE £30,000 Uncapped

    £25000 - £30000 per annum: Recruitment Genius: The fastest growing fitness cha...

    Investigo: Finance Analyst

    £240 - £275 per day: Investigo: Support the global business through in-depth a...

    Ashdown Group: Data Manager - £Market Rate

    Negotiable: Ashdown Group: Data Manager - MySQL, Shell Scripts, Java, VB Scrip...

    Day In a Page

    War with Isis: The West needs more than a White Knight

    The West needs more than a White Knight

    Despite billions spent on weapons, the US has not been able to counter Isis's gruesome tactics, says Patrick Cockburn
    Return to Helmand: Private Davey Graham recalls the day he was shot by the Taliban

    'The day I was shot by the Taliban'

    Private Davey Graham was shot five times during an ambush in 2007 - it was the first, controversial photograph to show the dangers our soldiers faced in Helmand province
    Revealed: the best and worst airlines for delays

    Revealed: the best and worst airlines for delays

    Many flyers are failing to claim compensation to which they are entitled, a new survey has found
    The stories that defined 2014: From the Scottish independence referendum to the Ice Bucket Challenge, our writers voice their opinions

    The stories that defined 2014

    From the Scottish independence referendum to the Ice Bucket Challenge, our writers voice their opinions
    Stoke-on-Trent becomes first British city to be classified as 'disaster resilient' by the United Nations

    Disaster looming? Now you know where to head...

    Which British city has become the first to be awarded special 'resilience' status by the UN?
    Finally, a diet that works: Californian pastor's wildly popular Daniel Plan has seen his congregation greatly reduced

    Finally, a diet that works

    Californian pastor's wildly popular Daniel Plan has seen his congregation greatly reduced
    Say it with... lyrics: The power of song was never greater, according to our internet searches

    Say it with... lyrics

    The power of song was never greater, according to our internet searches
    Professor Danielle George: On a mission to bring back the art of 'thinkering'

    The joys of 'thinkering'

    Professor Danielle George on why we have to nurture tomorrow's scientists today
    Monique Roffey: The author on father figures, the nation's narcissism and New Year reflections

    Monique Roffey interview

    The author on father figures, the nation's narcissism and New Year reflections
    Introducing my anti-heroes of 2014

    Introducing my anti-heroes of 2014

    Their outrageousness and originality makes the world a bit more interesting, says Ellen E Jones
    DJ Taylor: Good taste? It's all a matter of timing...

    Good taste? It's all a matter of timing...

    It has been hard to form generally accepted cultural standards since the middle of the 19th century – and the disintegration is only going to accelerate, says DJ Taylor
    Olivia Jacobs & Ben Caplan: 'Ben thought the play was called 'Christian Love'. It was 'Christie in Love' - about a necrophiliac serial killer'

    How we met

    Olivia Jacobs and Ben Caplan
    Bill Granger recipes: Our chef's breakfasts will revitalise you in time for the New Year

    Bill Granger's healthy breakfasts

    Our chef's healthy recipes are perfect if you've overindulged during the festive season
    Transfer guide: From Arsenal to West Ham - what does your club need in the January transfer window?

    Who does your club need in the transfer window?

    Most Premier League sides are after a striker, but here's a full run down of the ins and outs that could happen over the next month
    The Last Word: From aliens at FA to yak’s milk in the Tour, here’s to 2015

    Michael Calvin's Last Word

    From aliens at FA to yak’s milk in the Tour, here’s to 2015