All bow to the mighty China

New figures show that wine sales to China have seen remarkable growth over the last 4 years in both the fine wine market and bulk imports.

The IWSR (International Wine & Spirit Research) report shows bulk imports from Australia and the US have been rising with US exports to China doubling from 42.8 million litres in 2005 to 80.2 million litres in 2009. But, the high volume is held back by the low value. These wines are shipped in bulk and used to blend with local production, improving the quality of the local wines, and at the same time being re-branded Chinese wines. While many exporters are pleased, including the Australians who have increasingly seen China as a sink for their oversupply, it does little for wine and profitablility.

Bulk is a high volume low value business, while premium brands are higher value, low volume and top end Bordeaux producers have increasingly been investing marketing and money into China. For the 2008 vintage Chateau Lafite Rothschild has etched the Chinese symbol for the number 8 onto all 2008 Lafite bottles, 8 being a very lucky number in China. In partnership with CITIC, China’s largest state-owned investment company Lafite has planted 25 hectares of vines 800km north of Shanghai and the symbol is said to also represent the sloping vineyard. After the launch of the initiative, prices for Lafite rose 30% overnight and Berry Bros & Rudd say they sold out of their last 75 cases the same day.