Globowines Newswire: Wines from China – An inside story — By Rajiv Seth

[Source] – The Indian Wine Academy
*** Please note. Only 1-2 paragraph excerpts from the different topics Seth covers in his article of China’s domestic wine industry have been posted here. To access the full article click here.

China is associated with a variety of things, from food to martial arts but few in India link it with wine. However, the world’s fifth largest vineyard area and the seventh largest in production, according to OIV, the importance of Chinese Wines is growing, writes Rajiv Seth.

China has a long history of wine production. Chinese literature recounts the introduction of grapes from modern Uzbekistan during the Han dynasty (136 to 121 BC) and their planting in Xi’an, the legendary eastern terminus of the Silk Road near China’s Yellow River.

The Modern Era

The modern wine era in China began with the communist takeover in 1949. State-owned wineries were built and expanded. The term wine traditionally has a different meaning in Chinese culture than in the west. Jiu, which literally means alcohol, was used on all labels until recently, not allowing for the distinction among, alcoholic beverages. Rice-based alcohol is also referred to as wine. Modern Chinese winemakers now make an effort to specify grape wine by labeling with the term butajiu. The term wine is still widely misunderstood in China.

In 1978, Chinese government opened the door for the modernization through international involvement and by emphasizing wine consumption to help curb the national thirst for alcoholic beverages. Indeed, the Communist Party decreed that consumption should change from grain liquor to fruit liquor in 1987. The 1990s saw a decline in state-owned wineries, but an increase in foreign investment, modernization, and western technology.

The Current Scenario

More then 100 wineries have been established since the National People’s Congress in 1966 decreed that Chinese must reduce their consumption of grain alcohol, and switch to wine. Since then, the government has encouraged state-run ‘wine manufacturing plants’ to grow western grape varieties...

The Domestic Wine Industry

China has more than 300 wineries. Most of this development has been in areas near Beijing, in the eastern maritime region of Shandong. The industry is dominated by six large producers who account for about 55% of the total production. The average capacity of Chinese wineries is approximately 2000 tons, with 70% of the producers under 1000 tons. The more predominant wineries include Changyu, Great Wall, Dynasty, and Dragon Seal, all producing over 10,000 tons. Wine production in China in 2005 was 434,000 tons, an increase of 14% from 2004.

Standards and Appellations

Some wineries still use flavor essence, ethyl alcohol, sweetening, agents, and water to produce wines. There have been attempts to establish standards like an AOC type appellation system. New standards and types are evolving, including premium wine and ice wine which is produced in the extremely cold Xinjiang region and is available in abundance in stores in most big cities. Regulations are being put into effect to control raw materials, regional identity, variety, and vintage…

Vines and Viticulture

China has 26 indigenous vine species and hundreds of grape varieties. These are used to produce mainly low-end wines. Widespread introductions from Russia, including Muscat along with Italian Riesling, make acceptable, if not noteworthy products. Among the most common are Cabernet Sauvignon, Cabernet Franc, and the mysterious Cabernet Gernischt.

Shandong Province is roughly at the same latitude as California. Cool Pacific breezes moderate the temperature, which ranges from about 3°C in winter to 26°C during the summer. Monsoons come from the South China Sea, although spring is usually dry, and summers and autumns wet…

Winemaking Process

Virtually every winemaker harvests grapes based on sugar; measures of TA, pH. Aroma evaluation are not of common concern. Fermentation is conducted in modern stainless steel, concrete, French 200-L barrels, or in some cases very old wooden (oak) fermentors, with or without temperature control. Red wine cap management is not a large concern and consists almost entirely of pumping over. Practices such as cold soak, bleeding, and delestage are not practices and none of the producers is involved in the process maceration…

Dry Wines and food pairing

Dry wines have over taken sweet and semi-sweet wine production in the past 12 years. Sales of still red wines represent about 70 percent of the total. This seemed odd, since Chinese food does not go well with red wines. However, food and wine pairing, is not part of Chinese culture.

Marketing a dream or nightmare

China can be considered both a western wine marketer’s dream and nightmare. Wine consumption is rising faster than domestic production, currently allowing imports to make up the balance. Beginning January 1, 2001, Chinese tariffs on wine have fallen from 44.5% to 14%. This dramatic reform was brought on as part of China’s accession to the WTO, and has substantially changed the domestic wine market. Given the traditionally low incomes, the majority of wines must be sold at low prices- a problem in light of the fact that taxes account for about 50% of the retail price of imported wine. Domestic wine can sell for about 20 RMB/L ($4), with the very expensive ones at about $20.

About the author — Rajiv Seth became the first Indian in the year 1987 to receive a gold medal from wine and sprint education trust, London. Presently he is making continues efforts in educating the lab assistants of a number of wineries on procedures of micro vinification through his manuals.

[Source] – The Indian Wine Academy

Wines of the New World have stolen the spotlight at this years Decanter World Wine Awards in Covent Garden, London. Of the 24 international trophies, 15 went to New World, 9 to the old world.

“Chile has proven itself a producer of some of the finest Sauvignon, Riesling, Pinot Noir and Cabernet blends in the world,” writes Adam Lechmere of Decanter.com.

Other highlights from the event include:

• International Trophies for Sauvignon Blanc, Riesling, Pinot Noir and Bordeaux Varietals all went to Chile at a glittering dinner in the Floral Hall at the Royal Opera House in Covent Garden.

• The trophy for best Sauvignon Blanc Over £10 went to Undurraga’s TH from San Antonio, which judges described as ‘Crisp, herbal, grassy and zesty, appealing elegant and expressive.’

• Cono Sur’s Riesling won the Under £10 in that category, for its Bio Bio Valley Reserva 2008, with its ‘racy nose of lime, honey, grapefuit and ripe peach with hints of mineral and kerosene’.

• And for the fourth time in the past five years the Red Single Varietal trophy Under £10 went to an Argentinian Malbec: this year, the Malbec aka Rodolfo Sadler from Opi Sadler in Mendoza.

Click here for a full list of awards, including international trophy winners

Click here to read more about Decanter’s World Wine Awards from Adam Lechmere’s article “Chile triumphs at Decanter World Wine Awards,”

[Source] – Decanter.com

During Mir Global’s recent promotional trip in China I was lucky enough to be enlightend about North-Eastern China’s drinking habits. Dongbei ren as they are called in Mandarin seem to love to drink.

This article, “In China, taste for wine comes of age,” published by the Hindu is a interesting summary of Ananth Krishnan’s perspective on the ever developing Chinese wine palate.

I’ve copy and pasted a few excerpt for your viewing pleasure and I recommend checking out the full article by clicking here or on one of the other various links I’ve provided in this post.

Deep in the cellars of a sprawling industrial complex in China’s northern Hebei province, a row of giant steel vats runs as far as the eye can see. At first glance, they seem to be just another massive manufacturing plant in China’s northern industrial heartland. But the vats in this cellar do not hold chemicals or dyes. Each container holds some 1,000 tonnes of grapes, and this plant in Hebei’s Huailai County is at the heart of China’s wine revolution.

In China, even the business of wine, that most refined of indulgences, is all about quantity. The country now has the world’s fastest growing market for wine, with an estimated 600 million consumers. In 2007, Chinese wine consumption was estimated at a huge 800 million bottles. (India’s annual consumption is around 10 million bottles.)

The import of high-end European wines has been steadily rising in the affluent southern cities of Shanghai and Guangzhou. Now, more high-end boutique wines, set up as collaborations with European houses, have begun to emerge such as Grace Vineyards in Shanxi, which was set up by Spain’s well-known Torres wine house.

Back on June 16th Mir Global ran a small piece on South America’s numerous wine producing regions (click here to read). The basic premise of the blog post was to share with readers around the world that wines are produced across Latin America.

Chile and Argentina are unarguably the regional leaders in wine production, with their wines now common place in international markets around the world. Nonetheless, it would be unwise to overlook the potential of other up and coming producers from other countries in Latin America.

Of the many countries that do produce wine in South America, Bolivia is one country Mir Global Marketing is largely ignorant about. I stumbled upon this interesting from the Global Post this afternoon about Bolivia’s burgeoning wine scene and I must say I’m intrigued.

Here is a small excerpt from the article, A hidden high-altitude treasure; Bolivia’s Tarija region produces great wines — it’s just hard to find them outside the country.

Even the French will admit that Chilean and Argentine vinos can be as good as they come. But Bolivian wine? Well, just wait. If you haven’t tried a fine merlot, syrah, cabernet sauvignon, malbec or sauvignon blanc from this small but expanding wine-producing area in southern Bolivia, you’re in for a tasty surprise.

Bolivians long have had a passion for their national drink, singani, a grape brandy distilled from muscatel grapes, but as recently as a decade ago, locals turned up their noses at their own wines, preferring to buy excellent and inexpensive ones from their southern neighbors.

Today, however, Tarija’s major winemakers — Kohlberg, La Concepcion, Aranjuez, and Campos de Solana — are supplying the national market and sending their wines abroad, especially to Europe. Their secret: altitude.

…

Bolivia’s modern wine industry began some 40 years ago when Julio Kohlberg and others brought new varietals, mostly reds, to production. Nobody is really sure, but it is estimated that about 4,942 acres are under cultivation in the Tarija region. Producers began exporting about a decade ago but have been stifled by a lack of investment, marketing and stable access to markets.

Click here to access the complete article from the Global Post

Looking back on my most recent business trip to China to promote Mir Global’s wines and last night’s Sister City Networking Event in Chicago which Mir Global was present at, the two grapes the new Chinese wine consumer seem to prefer are Sauvignon Blanc and Malbec.

This doesn’t mean it is as simple as pitching quality bottles of each of these types of wines to importers / distributors in China. For starters, Chinese by and large have never heard of Malbec and when it comes to white wines you are always fighting against the current because about 70% of the wine consumed in China is red.

Cabernet Sauvignon’s dry, deep tannin full tastes are seldom well received in China. Wine experts and sophisticated consumers do exist, but these consumers are not representative of the greater wine market.

When it comes to Chardonnay, a young wine which has not been aged in french oak and has a sweet almost fresh taste (which reminds me of Sauvignon Blanc) can work. However, finding a young Chardonnay which has these qualities is quite difficult. It is a great deal easier to find a Chardonnay from California that does have a drier, woody taste… sadly Chardonnay’s of this style (which are very popular in the US), are not what the unrefined Chinese wine palate seems to prefer

A friend of mine who is marketing French wines to China has also found Viognier to be quite conducive with the Chinese palate. The floral fruity aromas of a Viognier, attract the Chinese to the wine and when paired with food it goes superbly with spicy Asian cuisine such as Thai food.

Sauvignon Blanc’s fruity and vibrant aromas along with its crisp and refreshing taste seem to draw the Chinese wine drinker in. During last night’s networking event in Chicago, I was particularly intrigued by the overwhelming positive reaction of women who sampled Palmer Vineyard’s 2008 Sauvignon Blanc.

Palmer’s Sauvignon Blanc gives the wine drinker a refreshing and crisp experience. It is almost as if this particular wine has a subtle carbonated kick to it. Not strong enough to think you are drinking a wine spritzer, but just enough to give it a unique kick and not overcompensate other elements of the wine.

Moving onto Malbec’s, Argentina’s pride and joy. Many describe Malbec as a versatile red wine, and this is exactly what it is. Malbec in my mind, is almost a hybrid of characteristics commonly associated with other reds such as Merlot, Cabernet and Pinot Noir. Malbec’s which have been aged in french oak retain their berry, fruity substance while also balancing in a magical way with the dry and intense tannin’s typically associated with a full bodied red wine.

** Reminder to all readers, opinions expressed in this entry are my own and should be not treated as fact. Thank you.

~ Bennett Reiss – International Trade Consultant at Mir Global Marketing LLC

[Mir Global Wine Corner Analysis] – HKTDC article, “China’s wine imports slowing.”

China’s wine imports are slowing reports HKTDC in this article. Wine imports increased a incredible 100% between 2006-2007 but slowed between 2008-2009, growing only 36%. None the less, total imports reached a impressive 6,389,439 cases, or 76,673,268 bottles of wine, making China the world’s largest wine import market (once again according to this HKTDC article).

Despite the slow down, the macro picture of China’s wine market is still overwhelming positive for wine exporters, especially for lower cost producers in the Southern Hemisphere.

The challenge for Argentinean and Chilean producers will be to figure out a way in which to take advantage of a more conservative and cost conscious Chinese consumer in the midst of the global economic downturn.

The HKTDC article, is of the opinion that the biggest winner from slowing wine imports will be China’s domestic producers. While this may be partially true, Mir Global Marketing Co., attributes the rise in the consumption of domestically produced Chinese wine to other far more significant market factors.

1) The global slowdown has forced consumers around the world to cut back on luxury spending and to be more cost conscious. For the Chinese wine consumer who has yet to develop their wine pallet and is exploring wine for their first time, it makes sense they would economically rationalize to spend 20 rmb on a Chinese bottle versus 120 rmb on a French bottle.

2) Wine demand in China can partially be attributed to the symbolism behind wine. As the great American author Ernest Hemingway once said, “Wine is the most civilized thing in the world.” If you are a Chinese consumer who has yet to develop your personal wine preferences and are trying to network in the business or political world where it is a good thing to appear “sophisticated,” you might be able to accomplish this with a Chinese bottle of wine. So, why invest in a expensive French or Italian bottle of wine?

Although, if a lower-middle class university student was about to meet with the head of Google’s Recruiting Office in Beijing, and had never tasted wine in his/her life, I think it would justify dipping into your savings for a French bottle of wine. But, if you’re simply going out for a nice drink with some friends on a Friday night to the Beijing’s bar district, splitting a bottle of French wine when you don’t know what you’re tasting will not be a common site.

To further explain:

A considerable amount of wine demand in China is generated from a new elite class of consumers with considerable spending power who can afford expensive wines and liquors. This includes, the rising class of sophisticated, metropolitan consumers in cities like Beijing, Shanghai and Guangzhou. Businessmen and women. Politicians. Wealthy university students. Chinese who have lived abroad. And of course, foreigners living or visiting China.

However, the majority of China’s new wine consumers can not afford to indulge in relatively expensive bottles of wine, especially in times of economic uncertainty. What is more likely to occur is the new middle class consumers in 2nd and 3rd tier Chinese cities like Harbin, Dalian, Suzhou, Chongqing, Kunming, Taiyuan, etc will attempt to emulate (the best they can) China’s new class of rising elites.

This has been the case in societies around the world since the dawn of civilization.

The main difficulty for Argentine and Chilean producers at the moment is convincing the very brand conscious Chinese to trust the quality of their products. France remains synonymous with quality when it comes to wine, while wines from Italy, Australia and Chile have had to struggle for years to build a trusting image with Chinese consumers.

Opportunity has come knocking at the door. Before you answer, just make sure you and your company are ready.

Bennett Reiss – International Trade Consultant at Mir Global Marketing Co.

China’s Wine Imports Slowing — HKTDC

“China has always been the biggest market of wine imports globally. However, the situation is changing. With the rise of China’s domestic wine production, China’s import of wine is on a downward turn.

After world renowned brands Hennessy, Remy Martin and Martell, Courvoisier’s Napoleon wine, one the four top-class brands of wine in the world has announced its formal entry into the Chinese market. Not long ago, Hennessy announced the debut of its Iridescence, a world classic type X.O. on the China market, alleging that China was its biggest consumption market for the first time.

Although various brands of imported wine products have poured into China’s market, the import growth has slowed down. According to statistics from the customs, China’s import of packed wine of less than two litres slowed down its growth last year, and the import of wine in packaging of more than two litres has stayed at the same level for three successive years. After hefty rises of about 100% in the 2006-2007 period, China’s import of wine was 6,389,439 cases of packages of less than two litres (nine litres per case), rising 36% year on year.

The increase of raw materials for wine production has weakened China’s dependence on import. With the expansion of planting areas for grapes, the raw materials for wine production have increased gradually. However, with increasing expansion of China’s wine market, there will be more and more foreign brands of wine entering the China market, indicating more fierce competition for China’s wine- making industry in the coming years. “