The maturing of China's wine industry

SUNDAY, February 09, 2014

China's wine industry, and its citizens' appreciation of wine, has come a long way since the days when sweet and fruity "half-juice wine" would be served at state banquets and diplomatic dinners.

Today, not only are Chinese drinking better, they are also drinking more.

So much so that China is being blamed for the deepest global wine drought in nearly half a century as demand outstrips supply.

This reflects China’s huge increase in annual wine consumption, which has risen fourfold in the past five years to around 1.5 billion bottles, with the country expected to become the world’s largest consumer of wine by 2016.

China is also producing more wine, buoyed by international wine companies’ investment in the local industry, and has become the world’s eighth-largest producer, ahead of Australia, Argentina and South Africa, with more vineyard hectares than the US.

New wineries and chateaux are appearing all the time in regions such as Ningxia, in the northwest of the country, including resorts with street signs shaped like wine bottles.

Just how good is Chinese wine?

Despite China’s vast size, there aren’t many good places for growing grapes. Areas that are dry enough to allow grapes to grow without succumbing to mould and disease are also extremely cold in winter, forcing farmers to bury their vines to protect them in winter.

Most Chinese wines – to use the language of wine experts – tend to be thin, dry and tannic, although the best among them are popular internationally, picking up awards in contests against French rivals, and receiving glowing recommendations from renowned wine critics such as Jancis Robinson.

Thailand, like China, is cultivating a modern wine industry, but it is younger than China’s and is much smaller, with around 3,000 hectares of vines compared with China’s 450,000.

As in China, there is a growing interest in wine from the rising middle class and a handful of Thai wineries, including Granmonte in Khao Yai and Siam winery in Hua Hin (Thailand’s biggest), are earning international plaudits for their quality, and they are selling well overseas.

Although Thailand’s wine industry is also being developed using international technology and expertise, unlike China the financing for the Thai industry is largely from domestic sources.

That’s because wealthy Thai individuals or family businesses own most of Thailand’s wineries, having entered the business after enjoying international wines from California, Australia or Europe.

Most of the Thai wineries are unlikely to be profitable yet, given their high costs of production, and instead represent investments made for the “love of wine”.

I’m sure many among us can identify with that sentiment, even if our pockets aren’t deep enough for us to do more than enjoy drinking, rather than producing good wine.

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