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."

Life and Style
ebookNow available in paperback
ebooks
ebookA delicious collection of 50 meaty main courses
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

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

ES Rentals

    iJobs Job Widget
    iJobs Food & Drink

    Recruitment Genius: Assistant Manager - Visitor Fundraising

    £23000 per annum: Recruitment Genius: The Visitor Fundraising Team is responsi...

    Recruitment Genius: Developer

    £30000 - £35000 per annum: Recruitment Genius: This is an opportunity to join ...

    Recruitment Genius: Estates Contracts & Leases Manager

    £30000 - £34000 per annum: Recruitment Genius: The Estates Team of this group ...

    Guru Careers: Brand Manager / Marketing Campaign Manager

    COMPETITIVE: Guru Careers: A Brand Manager / Marketing Campaign Manager is req...

    Day In a Page

    The Silk Roads that trace civilisation: Long before the West rose to power, Asian pathways were connecting peoples and places

    The Silk Roads that trace civilisation

    Long before the West rose to power, Asian pathways were connecting peoples and places
    House of Lords: Outcry as donors, fixers and MPs caught up in expenses scandal are ennobled

    The honours that shame Britain

    Outcry as donors, fixers and MPs caught up in expenses scandal are ennobled
    When it comes to street harassment, we need to talk about race

    'When it comes to street harassment, we need to talk about race'

    Why are black men living the stereotypes and why are we letting them get away with it?
    International Tap Festival: Forget Fred Astaire and Ginger Rogers - this dancing is improvised, spontaneous and rhythmic

    International Tap Festival comes to the UK

    Forget Fred Astaire and Ginger Rogers - this dancing is improvised, spontaneous and rhythmic
    War with Isis: Is Turkey's buffer zone in Syria a matter of self-defence – or just anti-Kurd?

    Turkey's buffer zone in Syria: self-defence – or just anti-Kurd?

    Ankara accused of exacerbating racial division by allowing Turkmen minority to cross the border
    Doris Lessing: Acclaimed novelist was kept under MI5 observation for 18 years, newly released papers show

    'A subversive brothel keeper and Communist'

    Acclaimed novelist Doris Lessing was kept under MI5 observation for 18 years, newly released papers show
    Big Blue Live: BBC's Springwatch offshoot swaps back gardens for California's Monterey Bay

    BBC heads to the Californian coast

    The Big Blue Live crew is preparing for the first of three episodes on Sunday night, filming from boats, planes and an aquarium studio
    Austin Bidwell: The Victorian fraudster who shook the Bank of England with the most daring forgery the world had known

    Victorian fraudster who shook the Bank of England

    Conman Austin Bidwell. was a heartless cad who carried out the most daring forgery the world had known
    Car hacking scandal: Security designed to stop thieves hot-wiring almost every modern motor has been cracked

    Car hacking scandal

    Security designed to stop thieves hot-wiring almost every modern motor has been cracked
    10 best placemats

    Take your seat: 10 best placemats

    Protect your table and dine in style with a bold new accessory
    Ashes 2015: Alastair Cook not the only one to be caught in The Oval mindwarp

    Cook not the only one to be caught in The Oval mindwarp

    Aussie skipper Michael Clarke was lured into believing that what we witnessed at Edgbaston and Trent Bridge would continue in London, says Kevin Garside
    Can Rafael Benitez get the best out of Gareth Bale at Real Madrid?

    Can Benitez get the best out of Bale?

    Back at the club he watched as a boy, the pressure is on Benitez to find a winning blend from Real's multiple talents. As La Liga begins, Pete Jenson asks if it will be enough to stop Barcelona
    Athletics World Championships 2015: Beijing witnesses new stage in the Jessica Ennis-Hill and Katarina Johnson-Thompson heptathlon rivalry

    Beijing witnesses new stage in the Jess and Kat rivalry

    The last time the two British heptathletes competed, Ennis-Hill was on the way to Olympic gold and Johnson-Thompson was just a promising teenager. But a lot has happened in the following three years
    Jeremy Corbyn: Joining a shrewd operator desperate for power as he visits the North East

    Jeremy Corbyn interview: A shrewd operator desperate for power

    His radical anti-austerity agenda has caught the imagination of the left and politically disaffected and set a staid Labour leadership election alight
    Isis executes Palmyra antiquities chief: Defender of ancient city's past was killed for protecting its future

    Isis executes Palmyra antiquities chief

    Robert Fisk on the defender of the ancient city's past who was killed for protecting its future