One of the offshoots of China's economic rise has been a sharpening of the taste buds for red wine. According to the industry group Vinexpo, China is the biggest consumer of wine in the world, quaffing more than 1.9 billion bottles of red wine last year, which marks an 136 per cent increase on 2008.
Former Manchester United manager Alex Ferguson focused on Asian buyers when selling off his wine collection, and Christies has a dedicated wine auction house in China.
The growth of the market for fine wine in China offers a real insight into the broader growth of the economy, and reflects many of the themes affecting the overall economy – strong price rises, technology transfer, developing bubbles, domestic production struggling against foreign imports and the problem of piracy.
A fascinating documentary about high-end Bordeaux, called Red Obsession, is a great primer for anyone interested in this phenomenon, and we are not just saying this because an article from Asia Briefing ("Counterfeit wines leave a bad taste for EU exporters", Tuesday, June 19th, 2012) features prominently in the film.
The film covers the rise and fall of the market for top-tier wines from the chateaux of Lafite, Latour and Margaux, and the instrumental role that China played in the 10-fold price increase for their wines and, ultimately, in inflating the bubble.
Hong Kong is home to the two most expensive bottles of wine in the world: a pair of 1869 Chateau Lafite worth €162,000 each.
Of course, as with so many takes on China’s metamorphosis in recent years, the documentary is in danger of being overtaken by events, as there are whispers of a market revival in recent months, as buyers try to get in ahead of the curve.
The current crackdown on corruption has seen the market for many luxury products come under pressure, although wine buyers tend to be more discreet and often hail from the private sector, and relatively few collectors come from the corrupt group of public servants who want banquets and gold watches.
Some of the characters in the documentary are amazing – the Shenzhen sex-toy tycoon Peter Tseng, who owns more than €40 million worth of wine, or George Tong, who manufactures admittedly less exotic toys, but also is a wine buff.
The domestic business has suffered recently, especially since a 2010 report CCTV about domestic winemakers making fake wines using chemicals and adding fake labels to bottles.
One of the country’s oldest winemaking regions, Changli County in Hebei, is currently trying to rebuild its reputation by spending billions of yuan in upgrading production facilities, including developing a special wine terroir in the area.
