China's Counterfeit Wine Market Is Killing Wine

Counterfeit wine bottles. CBS NEWS

Nic Cavell, New Republic: How China Conquered France’s Wine Country

French connoisseurs sold the Chinese pomp and prestige, until they started manufacturing it themselves.

In 1996, Chinese premier Li Peng surprised his audience at the National People’s Congress by toasting the Ninth Five-Year Plan with red wine: “Drinking fruit wines is helpful to our health, does not waste grain, and is good for social ethics,” he announced. For China’s rapidly growing underclass, this gesture signaled a commitment to rein in the fraud and waste epitomized by party banquets, where officials were known to drink each other under the table with bottles of Moutai Flying Fairy and other spirits derived from grain. For the elites in question, it was an unmistakable signal that business as usual required a new currency. Within a few years, they were using bottles of Château Lafite Rothschild to gain favor and ease transactions.

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Editor: The Chinese are not the only ones who are having problems with counterfeit wines .... Counterfeit wine: A vintage crime (CBS)

China And Europe End Their Wine Dispute

A woman tastes wine at Wine China Expo 2013 in Beijing September 24, 2013. Credit: REUTERS/Kim Kyung-Hoon 

  EU, China End Wine Dispute Ahead Of Xi's European Ttour -- Reuters 

(Reuters) - China and the European Union have reached a deal to end a dispute over European wine exports to China, the latest sign of improving ties and just days before China's president visits Europe.

Beijing opened an inquiry last year into whether Europe was selling wine in China at unfairly low prices. The move was widely seen in Europe as retaliation over EU efforts to hit Chinese solar panels with punitive import duties.

The solar panels dispute was resolved, but China had pressed ahead with the wine case, saying it was a separate issue despite European expectations that the inquiry would also be dropped.

Paris was especially eager to see the probe called off. It remained an obstacle in trade relations between the two countries before next week's visit by Chinese President Xi Jinping to the French capital as part of a European tour.

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My Comment: The Chinese enjoy European wine .... and the EU enjoys selling it. I did not expect this dispute to last long.

Building A Winery In China From Scratch

Judy Leissner. Grace Vineyard

Building A Winery In China From Scratch -- Wall Street Journal

Move over baijiu, you’ve got company. With its auspicious hue and perceived health benefits, red wine is “the banquet drink of Chinese officials and businessmen,” according to Harvard Business School professor William C. Kirby.

It’s a trend that bodes well for Grace Vineyard, which Prof. Kirby profiled in a Harvard Business School case study three years ago that chronicled China’s fast-growing wine industry.

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My Comment: The Chinese are definitely developing a taste and market for wine .... and if I was a betting man .... grace Vineyard will be a success.

The Future Of Wine In China

Emma Gao (高源), chief winemaker at Silver Heights (Image: Silver Heights)

The Future Of Wine In China (Part 1) -- Jing Daily

Despite some headline-catching news, China’s wine market remains at an early stage of development. While this gives market participants an unprecedented opportunity to shape it to their advantage, it also increases the level of uncertainty under which key decisions must be made.

In this column, I highlight some of the key factors shaping China’s wine market, as well as its domestic wine industry. Some of these are global in nature; i.e., they have been influencing the industry in other markets and are likely to be felt in China, although potentially in a different way and at a different pace. Others are more local, rooted in China’s particular stage of market evolution and relationship with wine.

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Editor: Part two is here.

Courting Chinese Wine Buyers

US Winemakers Court Chinese Buyers -- McClatchy News

LODI, Calif — With bottles ready for tasting, a group of Lodi wine producers waited anxiously last week for a delegation of monied business people they hoped to impress. The vintners burst into applause when the group finally arrived, over an hour late.

These honored guests weren't Hollywood moguls or Silicon Valley venture capitalists. They were potential customers and investors from the city of Shenyang in northern China, coming to check out Lodi as a potential source of affordable wine to supply China's rapidly growing market.

The rising middle class in China and other Asian-Pacific countries is fueling one of the wine world's fastest growing markets. According to the McKinsey Global Institute, China is expected to add 235 million consumers by 2020 and will account for 20 percent of the global luxury market by 2015.

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My Comment: The Chinese have the wine bug .... and they will need to satisfy their wine cravings.

China's Wine Investment Market Cools Down

Highlights of this week's event include blind tastings and a charity auction (Image: Luxury Insider)

China's Wine Investment Market Cools Down -- China Daily

China, the world's fifth largest wine consumer, has shown the sign of a cooling wine market, the Oriental Morning Post reported Monday.

Shanghai, China's main distribution center for imported wines, have seen declining wine imports for five consecutive months, Xinhua News Agency reported Sunday.

The Shanghai Customs District imported 29.63 million liters of wine in the first quarter of this year, and the average price dropped to $9.8 per liter. March imports were 7.35 million liters, a month-on-moth decrease of 11.3 percent according to the Xinhua report.

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My Comment: It has cool down for now .... but the Chinese are beginning to have a taste for investing in good wines, and this 'investment' taste will only increase with time.

Bordeaux Looking For Chinese Investors

Chateaus in Bordeaux, the world's top wine-producing region, hope to attract more Chinese investors.

Bordeaux Looks To China Amid Slump -- China Daily

French winemakers in Bordeaux, the world's top wine-producing region, are vying for more Chinese investors, said a senior official with the region's chamber of commerce.

"Their investment will create a win-win situation since many chateaus are currently experiencing sluggish business and an ever-shrinking market," said Pierre Goguet, president of the Chamber of Commerce and Industry of Bordeaux, during a promotional event for the China Dalian International Wine & Dine Festival, which is set to open on July 12.

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My Comment: My advice to a Chinese investor .... invest only if you love wine .... not because you want to make money.

China Estimates That There Are 1.95 Million Bottles Of Counterfeit Chateau Lafite Rothschild Shipped Last Year

Is China Really a Vintage Wine Drinker? -- China Perspective

France's renowned Chateau Lafite Rothschild officially produces 240,000 bottles of wines annually, 50,000 of which are shipped to China. Yet as many as two million bottles of so-called Lafite wines were sold in China last year, according to estimates by industry data collectors.

So where did the remaining 1.95 million bottles of Lafite wines come from? Or more precisely, what on earth did those 1.95 million bottles contain?

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My Comment: These numbers are incredible .... but China will not change their guidelines on how wine is marketed .... for now. And no ... China is not a vintage wine drinker nation right now .... but they are trying to learn, and some are spending their money where their palette is.

The Growing Problem Of China's Counterfeit Wine

China's Faux Bordeaux Stirs Wine Market -- Reuters

(Reuters) - Master of Wine Jeannie Cho Lee could tell instantly when she tasted fake wine at a Hong Kong dinner party.

"Just from colour and the nose, once you taste it, it was confirmation that it wasn't the genuine wine," she said.

But not everyone possesses Lee's acumen. China's booming appetite for fine wine in recent years has fuelled a rampant counterfeit market that industry insiders fear could be turning local buyers off.

"What we're seeing across the country is a proliferation of knock-offs and copycats and outright counterfeit as the imported wine industry really explodes in this market," said Ian Ford of Summergate Fine Wines in Shanghai, adding that counterfeiters are taking advantage of inexperienced Chinese consumers.

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My Comment: The Golden Rule is .... buy from a seller that you know and trust and who have a direct contact with the winery of your choosing.

Chateau Lafite To Build First Asian Vineyard In China

A groundbreaking ceremony is held following the construction of an Asian production base of Chateau Lafite Rothschild, a well-known French wine estate, in east China's Shandong province on Sunday, March 11, 2012. [Photo: cnwinenews.com ]

Chateau Lafite Builds First Asian Vineyard In China -- CRIEnglish

Chateau Lafite Rothschild, a French wine estate that produces the world's most expensive wines, has started construction on its first Asian production base in east China's Shandong province.

Chateau Lafite Rothschild, a French wine estate that produces the world's most expensive wines, has started construction on its first Asian production base in east China's Shandong province.

Domaines Barons de Rothschild, Chateau Lafite's parent company, has teamed up with CITIC, China's largest state-owned investment company, to build the base in Penglai, a city on the easternmost tip of the province, which is known as one of China's largest wine-producing areas.

A groundbreaking ceremony was held on Sunday, said Cong Yanpeng, head of the city's wine bureau, on Monday.

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My Comment: Chateau Lafite Rothschild has just given the Chinese wine industry a huge seal of approval.

Yuan Jiang, Chinese Wine Mogul

People visit France exhibition area during the Top Wine China 2011 fair at China World Trade Center on May 25, 2011 in Beijing, China. ChinaFotoPress / Getty Images

Yuan Jiang, Chinese Wine Mogul: 10,000 Bottles a Day and Counting -- Time

This post is in partnership with Worldcrunch, a new global-news site that translates stories of note in foreign languages into English. The article below was originally published in Economic Observer.

Yuan Jiang started his first business, a direct marketing services provider called Roadway, in 2001. Seven years later, Roadway ranked first in its sector in China, with profits twice that of its nearest rival. At that moment, Yuan agreed to a merger with the American firm D&B (Dun & Bradstreet) for more than $40 million.

It was 2008, when the financial crisis occurred. There wasnt much hope for my company to be listed, Yuan says.

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My Comment: I expect this trend to continue to grow as China's economy expands and more people have disposable incomes to enjoy wine.

Are Chinese Aficionados Fueling A Wine Bubble?

Visitors to VineExpo Asia-Pacific sample wine in Hong Kong, May 25, 2010.
Mike Clarke / AFP / Getty Images

Bordeaux Breaks the Bank: Are Chinese Aficionados Fueling a Wine Bubble? -- Time

This post is in partnership with Worldcrunch, a new global—news site that translates stories of note in foreign languages into English. The article below was originally published in Le Nouvel Observateur.

Asian millionaires' thirst for the best Bordeaux wines has sent prices skyrocketing, and the most prestigious Châteaux have been turning astronomical profits as a result.

At a May 17 auction in Hong Kong, new Chinese millionaires were fighting over the few wines that Château Latour — which was rated as First Growth under the 1885 Bordeaux Classification — brought out of its wine cellars. It took Christie's seven and a half hours to sell the 392 lots. Château Latour, which belongs to François Pinault, had planned to stimulate wine collectors' thirsts by putting 19th century wines up for auction, including one bottle dating back to 1863 which sold for 48,730 euros.

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My Comment: Considering how expensive these wines have become over the past few years ... I would have to say yes .... the Chinese have created a "wine bubble"

The Chinese Invasion Of French Wine Country

Chinese businessman Richard Shen Dongjun feels right at home in Bordeaux Photo: AFP/GETTY

Chinese Buyers Snapping Up French Vineyards -- The Telegraph

Chinese businessman Richard Shen Dongjun feels right at home in Bordeaux. And he's one of a growing number of Chinese investors buying French chateaux to produce their own wines.

In the ancient domaine of Laulan Ducos, a 15th century French chateau on a gravelly Bordeaux outcrop surrounded by fine vines, Chinese businessman Richard Shen Dongjun feels perfectly at home.

He is, in fact, at home. The diamond tycoon has just bought the estate, and its vineyard, lock, stock and oak barrel.

It is the second to be taken over by Asian investors in just over a month, and the sixth Chinese-owned vineyard in this celebrated wine-producing region.

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My Comment: I can't blame them. They want quality, and they have the money to buy it.