Wed 25 Jul 2012
American wines to break Chinese market?
Chinese wine-tasting event highlights potential for US wines
China has been playing host to greater number of wine-tasting events in recent times, demonstrating the potential for American wines to break the market.
The US embassy helped to drive demand by holding an American wine-tasting event in the capital of Henan province,
Zhengzhou, China Daily reported. Zhengzhou is among the largest of China's provincial capitals with a population of eight million and could be a more preferable terrain for investment than major cities like Beijing and Shanghai.
The American wine-tasting event hosted in Zhengzhou on July 10th drew in an audience double the size of what was expected.
More than 400 attendees, largely made up of industry insiders, arrived on the day to taste 12 wines from different regions of the US.
Ma Zhen, editor in chief of the event's co-sponsor Wine In China, told the China Daily that he understood 80 per cent of the audience was in fact wine industry experts from Zhengzhou.
A two-hour introduction to US wines was delivered by Yin Lixue, director of Godolphin Wine Services, who was struck by the location of the tasting.
She told the news provider: "I was a bit surprised to learn that the event would be held in Zhengzhou, because even in bigger cities in China, American wine is still relatively new."
However, the expert identified how the city seemed to be adapting to the rising popularity of wine, with local hoteliers exercising appropriate wine-serving techniques.
On the eve of the wine-tasting, Yin was served by a professional sommelier at a Zhengzhou restaurant.
She told China Daily: "That standard of procedure of serving wine has not even been popularised in big cities such as Beijing, Shanghai and Guangzhou.
"It just means that wine is no longer a novelty in Zhengzhou."
There definitely appears to be opportunities for American wine companies to expand their horizons in Zhengzhou, although stiff competition would certainly prove a challenge to foreign investors.
Head of Imported Wine Section of Henan Province Alcoholic Industry Association, Xiong Yuliang, explained at a recent news conference that Chinese consumers were developing a deeper knowledge of the quality of wine.
He issued a warning to potential investors not to underestimate the market as it could pose strong competition to those with little knowledge of it.
Still, Ralph Bean, director of the agricultural trade office, remained optimistic about the potential for American wines in China, particularly in light of a recent acquisition.
Henan real estate company Meijing Group bought the Silenus Vitners chateau in Napa Valley to establish the Silenus International Group in 2010 - which specialises in selling US wines in China.
Mr Bean suggested this purchase reflected the robustness of the Chinese market and the kind of opportunities it offers US wineries.
He told the news provider: "If these guys are willing to commit their money to buy an entire winery that tells me there's a good market for US wines here in Zhingzhou."
Deputy general manager of Silenus International Group Wang Yuan revealed the company forked out $10 million for the winery.
"The head of our company is far-sighted. He feels that American wine will become popular, and the purchase will be a good investment," Yuan told China Daily.
Meanwhile, Xiong Yuliang suggested that imported wine sales have surged 30 per cent in recent years, but warned the Henan wine market remained at a basic level.
Consumers in the province are willing to spend between 100 and 300 yuan ($16 to $47) on a bottle of imported wine, Yuliang claimed.
Opportunities for US winemakers in Asia do not stop there, however, with recent figures from International Wine and Spirit Research (IWSR) directing investors towards India.
According to IWSR, wine consumption in India is expected to rise to 2.4 million nine-litre cases per year by 2020, despite current wine consumption remaining relatively flat compared to beer and spirits.
