A Storm in a Teaccup, I mean Wineglass

by Eve Resnick on June 7, 2013

in International Markets

china_wineChina and European wines were having a wonderful honeymoon until a few days ago when China threatened to fine European wines in retaliation of European taxes on Chinese solar tachnology imported to Europe. (I am NOT joking!) European wine producers exported more than a billion euros to China in 2012. France is the first exporter with 140 millions liters of wine sold in 2012, Bordeaux being  the main region while Burgundy does not rely as musch on China that bringts only 50 millions€.

Chinese wine drinkers are more and more educated and can make the difference between bad, mediocre and great wines. This is thanks to the education brought by Chinese sommeliers and wine professionals trained in Europe as well as iniatives by major European brands and estates.

Michel Gonet, famous Champagne House also owner of several properties in Bordeaux, opened a private club in Shanghaï, pronounced Gaonai. First famous for its high quality Champagnes, Michel Gonet expanded to Bordeaux where he acquired Château Lesparre and château Haut-Bacalan managed by Charles-Henri Gonet where the famous Chinese TV series, Cherish Our Love Forever, was filmed in 2010. Because of his priviledged links with the Chinese young consultant Hao Zeng and the success of the series in China, Frederic Gonet reinforced the family presence in Shanghai through the Gaonai Center.  The Club is dedicated to the French lifestyle with upscale wine tastings, master classes on Bordeaux wines and of course a gourmet restaurant.

On an even more commercial scale, some major auctions are now organized by the most prestigious brands in Shanhai, Beijing or Hong Kong.  Domaine Clarence Dillon, owners of Château Haut-Brion, Château La Mission Haut-Brion and Château Quintus, just announced its first ex-cellars auction in Asia, according to Jane Anson. Chinese conglomerates are buying wine estates in Bordeaux and Burgundy. The famous wine consultant Michel Rolland just sold his three chateaux to Sutong Pan, chairman of Hong Kong-based investment holding company Goldin Financial Holdings and Chateau Loudenne was purchasesd by the Beiju Group.

What would be the potential consequences of the Chinese retaliation? Wine professionals and European press were outraged by the Chinese threat and its consequences on sales in China. More likely, any retaliation would also be a risk for  Chinese wine lovers. They would have to pay a lot of money to get their favorite wines. A moderate consumption of wine (instead of the current heavy consumption of beer) is recommended by the Chinese governement as  a good influence on one’s health. Wine is also becoming a cultural product (more than just a commodity or a status product) in China. And what about all those properties bought by Chinese groups or individuals? What will become of them?

The delicate balance  between the French and the Chinese wine industry could be challenged by a move of the Chinese governement.  Wine is not only about money: it is also about culture, sharing and taste. Europe built over the last 20 years deep links and gained much knowledge about the Chinese consumers’ tastes. Chinese wine lovers learnt to appreciate and know our wines. What a pity it would be to destroy this nascent cultural exchange over some solar panels issue. Let us hope it is only a storm in a teacup, at least in a very samell wine glass.

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