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China’s looking to take over another industry - wine

Tending vines at a vineyard in Miyun County, near Beijing

Janis Miglavs

The chateau seems to say you're in France, and so do the roses and grapevines. But you're not even close. You're in a vineyard in Miyun County, near Beijing, that is being tended by Chinese workers.

If the centuries-old London-based wine merchant Berry Bros. & Rudd is right, China will lead the world in wine production in the next 45 years. And if that prediction seems outlandish, consider that China is already outproducing the likes of Chile, Argentina and Australia. Chinese wine is also starting to get noticed on the world stage after years of being dismissed as plonk by Western oenophiles. A Chinese Bordeaux blend won Best in Show at the Decanter World Wine Awards in 2011, along with these words of praise: "big, quite leafy black fruit with exciting minty perfume." A less expensive Chinese Bordeaux also won top honours in 2012 (Judges: "lovely fruit intensity").

China's emergence on the world wine stage is in part a result of its investments in vineyards abroad, which have given Chinese vintners first-hand knowledge about production techniques. Since 2008, wealthy Chinese buyers have snapped up dozens of French vineyards. Meanwhile, Moët Hennessy is planting a vineyard in China, to produce red wine for the domestic market. That follows a similar expansion into China by Domaines Barons de Rothschild, announced in 2009.

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It also helps that wine consumption in China has increased by 20% annually, overtaking the United Kingdom as the world's fifth-biggest wine consumer in the world. China could well be No. 1 within 20 years. Already, the country's influence on global wine markets is evident: Prices for high-end vintages rise and fall based on the shifting tastes of wealthy Chinese palates.

The question is, when can we expect to see rows of Chinese wines rivalling bottles from Italy, France and Spain in our local stores? Since China is mostly focused on its own domestic consumption right now, exports remain novelty items. Ontario's LCBO recently carried a Great Wall Cabernet Sauvignon 2008, but it is now reduced to clear. Though as production rises in the People's Republic, it is plain where the market is headed: China has dominated export markets for everything from toys to shoes to electronic gadgets—and it seems bound to work its way up the value chain for wine, too.

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About the Author
Investing Reporter

David Berman has been writing about business and investing since 1995. He has written for a number of magazines, including Canadian Business and MoneySense. He worked at the Financial Post as an investing writer and daily columnist before moving to the Globe and Mail in 2008. More

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