China headed for wine greatness
Say “Chinese wine” to many and images of less-than-loved domestic Chinese wine brands like Dynasty (often pronounced “Dy-Nasty” by those who have tried the RMB 20 bottles of the stuff) and Great Wall come to mind.
This image could be changing though as domestic and international demand of Chinese wine is increasing production to levels never before seen in the country.
A new industry report catalogs the Chinese wine market’s progress. It says that some “analysts believe the country could overtake Australia in the next three years.”
The report, by French wine exhibition organizers Vinexpo, said that China produced 72 million cases of wine in 2009, an increase of 28 percent from 2008.
- More on CNNGo: Pairing wine with Chinese food -- it can be done
If China keeps producing wine at its current rate, the country will generate 128 million cases of wine by the end of 2012, an increase of 77 percent that would see it overtake Australia's forecast of 121 million cases.
Calls that China will dominate yet another industry might be a bit premature though. Wine Australia’s Asian director, Lucy Anderson, said to Australia’s Herald Sun that the growth of China’s wine industry does not threaten Australian exports.
That is not the focus of the industry at the moment. The motivation is more to show Chinese drinkers local growers could compete internationally.— Denis Gastin, wine writer
“Based on previous figures we should see growth in exports [to China] of about half a million cases in 2011,” she said. “The Chinese wine market is growing at around 20 percent per year and Australian export growth is tracking with it.”
In addition to being its competition, China is also Australia's fastest-growing export wine market.
Since 2004, wine exports from Australia to China have increased by 84 percent annually.
Much of this growth in the demand for Chinese wine though comes from the domestic market.
"Some Chinese labels have exhibited internationally and sold a tiny amount of wine,” says Denis Gastin, a commercial wine writer who regularly travels to China. “But that is not the focus of the industry at the moment. The motivation was more to show Chinese drinkers local growers could compete internationally.”
Although growth in the Chinese wine industry is the driving force behind the bottle count increase, domestic consumption levels are still relatively low compared to other nations, according to the Vinexpo report, which means there’s still significant room for growth.
So China could one day become one of the world's biggest wine markets.
This report comes less than a month after China’s latest food scandal, which tainted domestic wine producers.
- More on CNNGo: Can Shanghai become a fine-wine capital?
Chinese media reported that six people were detained and cases of tainted wine bottles were pulled off store shelves after red wine made in Changli county, Hebei Province, one of China's main wine-producing regions, was found to have been both chemically altered and falsely labeled as a superior product.
A total of 5,114 boxes of wine were thought to have been falsely labeled.
Jiahua, one of the three wineries shut down, was found to use nothing but water and chemicals to make its wine, with the cheapest bottle selling domestically for less than RMB 10.
CCTV claimed that Jiahua sold about 2.4 million bottles of this wine each year.