French wine the new sophistication in China. More consumed than is made!

US$450 for empty bottle to recyclers!

The whole point about being a 'gloriously rich' comrade is to flaunt it. As Mercedes and BMW cars become commonplace, French wine is the new sophistication. The scramble to impress business associates and government officials with expensive wines has put China firmly on the global wine map and is boosting Hong Kong's role in the trade.

More French wine consumed in China than is made!
Statistics for top Bordeaux consumption in China indicate volumes far in excess, annually, of Bordeaux fine wine production! Local merchants have not missed the opportunity to profit from faking it as they have other luxury products. Consumer ignorance works to their benefit. Cheap bulk red wine from Chile is imported and bottled with fake Bordeaux labels.

Consumers overcome the cough-mixture taste of doctored wines and immature Bordeaux with blocks of ice, Seven-Up and Coke. There are no complaints as few have any clue what quality wine should taste like.

Shanghai Daily reported one enterprising merchant importing bulk reds through Hong Kong, then bottling it aboard a factory-ship into recycled and fake Chateau Lafite bottles. CCTV the national broadcaster, cited the case of a 5-star hotel in Dongguan, South China, moving 40,000 bottles of Lafite annually. The Chateau Lafite annual allocation to the entire China market is only 50,000 bottles.

Although Chateau Lafite produces about 200,000 bottles annually, China records about 3 million bottles sold every year, making 80-90% of Lafite fakes. They sell at US$7,800 a bottle at some restaurants. Formal business entertainment is expected to serve Lafite as the dinner wine. Businessmen dare not disappoint their guests. Empty bottles of real Lafite trade at near US$450 a bottle to recyclers!

Like the European luxury handbag, watch and couture labels in China, serious punters have more confidence in purchasing the same brands in Hong Kong.

Hong Kong wine auction capital of the world!
In 2008 the Hong Kong government abolished all taxes on wine. The number of wine related companies registered in 2008 was 850. By 2010 that grew to 3,550. Staff engaged in the wine trade increased from 5,000 to 40,000.

The zero-tax situation catapulted the city into auction-wine parity with London and New York. Much of that demand comes from China where a combination of hot money and new rich seeking social status have rushed to this liquid asset.

Wine auctioneers Christie's and Sotheby's of London plus New York's Acker, Merrall & Condit, have enjoyed record sales and profits in Hong Kong from 2009. They now hold multiple auctions through the year in Hong Kong of vintage Bordeaux and private collections.

Charles Curtis, Christie's head of wine sales puts it delicately: "One must have a nuanced view of the market. Taiwan, Hong Kong and Singapore have relatively mature buyers. Mainland China has the characteristics of a newer market. They tend to focus on the top-line stuff, which explains why sales of Bordeaux such as Lafite-Rothschild and Haut Brion have skyrocketed."

Serena Sutcliffe, Sotheby's wine chief adds: "They're building bigger houses and want a cellar. It's an important part of business and social life."

No storage discipline. Mismatch with Chinese food
Stephen Quinn who taught for a year at Ningpo and writes a weekly wine column for China Daily, is appalled by the lack of proper wine storage. "I encountered some dreadfully abused imported wines. Good labels which on uncorking, displayed none of the aroma, flavour or taste that I associated with them - a sure sign of storage-trauma from Europe and within China. Temperature and relative humidity fluctuations can kill the best of wine. It is fragile like cigars."

Stephen who now works and lives in Hong Kong is relieved to be in a city with a more mature wine culture and responsible merchants. He is all too aware how local traders exploit the China market where consumers readily believe everything they are told about wine. He blames the Robert Parker factor for the excitement about red Bordeaux for investment and banquet wine status. He observes "Most Chinese food does not pair well with red Bordeaux. But people still try to match them - with disastrous consequences for the cuisine and the diners".
 
Annabel Jackson teaches at the vocational hotel school in Macau, Instituto de Formacao Turistica (IFT). She is impressed by the hunger for knowledge about wine among her students from the mainland (about 1/3rd of her class). Her students prefer white wines over red due to their natural sweetness, lack of tannic bite and New World reds (less 'sour') over Old World reds.

Thumbs down for Bordeaux with Chinese food

French cartoon book lampoons Parker

Annabel says there are temperature-storage-transport issues with Hong Kong as well below the premium distributors. Many local Chinese inhibited by language and perceived cost, frequent local stockists in the New Territories and Kowloon who also ply Chinese restaurants with red Bordeaux.


100-point Parker Rating arrives
Lawyer Robert Parker who publishes the Wine Advocate, created a 100-point rating system to score wines -  providing American consumers a dummy's guide. The country of fast-food and instant coffee took to that instantly. Retailers would badge Parker ratings on bottles. Consumers looked no further. It freed them from learning, knowing, tasting and discriminating.

The Prophet speaks
Parker's Wine Advocate states: "...wine is no different from any consumer product. There are specific standards of quality that full time wine professionals recognize."  That is the most cynical, self-serving statement about the pleasure of enjoying wine. It suggests wine drinkers defer to a coterie of  'full time wine professionals' who will reduce taste to numbers. He has held the wine market hostage for nearly four decades, perhaps more by default than by design.

Cynical wine merchants and auctioneers chasing Chinese hot money are parlaying Parker points to flog their bottles. It simplifies everything.
ENDS