Chinese wine market an awakening giant
The Chinese are increasingly replacing beer with wine on their dining tables and are learning how to appreciate the taste of wine, said the head of wine for China Simon Tam at auction house Christies.
The current annual per capita wine consumption in China is a mere 0.35 litres, however the Chinese domestic wine market is projected to become the largest in the world in a few decades.
In anticipation of the optimistic business prediction, Christies appointed Tam early this year as its first ever head of wine for China to tap into the new market.
The primary role of the head of wine is to educate and nurture Chinese wine lovers and provide them with information so that they can understand the differences between wines and more importantly the pricing, now, tomorrow and perhaps also in the future, the Hong Kong wine expert said on the TDM Talk Show.
Its very important to see how much the wine costs today versus tomorrow and future trends in order to make some predictions, he added.
China doesnt have a history of drinking grape wine, but Tam believes that its a natural progression for the nation to begin considering appreciating the drink in the 21st century.
Wine is a beverage of choice in modern societies. Its healthy and has a great diversity from all countries, he told the audience.
Chinese people are increasingly shifting from beer to wine on their dining tables [...] Wine is perceived to have a level of sophistication and its taste is irreplaceable and tangible. Its very easy for people to like and enjoy, he pointed out.
The drinking culture in China is di! fferent from that in most western countries where fine wine is widely known to be swirled, sipped and savoured. Tam said its a learning process for the Chinese and this evolution is already happening very rapidly.
Nevertheless, 98 percent of wine manufactured in China is indeed consumed domestically, which Tam said shows the country definitely has a wine culture.
I think at the moment Chinese wine producers and the wine industry are pretty content. Having said that, last year a very substantial UK supermarket decided that Chinas wine production should not be ignored and they went to China and bought wines for the UK supermarket for sale, he said.
With the worlds largest population at 1.3 billion people China undeniably has an enormous number of people to market to, who will also buy and consume local wine.
Chinese wine lovers are really enjoying the wine made in China in addition to imports from all over the world. Besides Beijing and Shanghai, wine can be seen on the tables in some second-tier cities such as Hangzhou and Suzhou, Tam said. We have wine in China consumed by Chinese people that were sold for 30 renminbi to 30,000 renminbi a bottle.
We have a client at Christies who bought very fine wine for their daughters wedding, whereas some 20 or 30 years ago it would be a bottle of XO Cognac, and so the world is changing very rapidly, he continued.
Last year counterfeit wine was seized in mainland China and concerns were raised about whether the country should adopt international wine production standards in order to gain acceptance in the global wine market.
Yet, Tam believes that would be very difficult to do. The story was magnified out of proportion in the media around the world.
China does have a very stringent set of regulations governing productions. The most important is the Chinese wine industry has a self-imposed regulatory standard. The government can offer suggestions and assistance but its up to the industry when it comes to self-regulation,! he poin ted out.
Important market
For Christies and many others, the finest and rarest wine is a huge investment opportunity.
New wine lovers keep coming onto the scene and the fine wine market is growing very rapidly with China an awakening giant and new economies such as India and Russia, the wine expert said.
Only fine wine has a proven track record, the ability to improve with age and an international awareness of quality and regard, he added.
However, Tam forecasted that mid-range wine also has a great potential to gain success in the Chinese market in the near future.
At the moment there is a very clear entry point for wine and there is a segment of well informed collectors who are buying and investing in some of the finest vintages of the world [such as France and Italy], he said.
The middle part of the market - wine from the US, Australia, Chile and Argentina for example - is expected to expand significantly and also attract collectors as well as Chinese wine lovers who would like to know what other wine around the world tastes like, he added.
Meanwhile, the newly appointed head of wine for China pointed out that Macau, thanks to the Portuguese influence to the territorys wine drinking culture, is a very important market for Christies.
Portuguese wine is some of the finest in the world and has gone a long way in maintaining, preserving and now as a platform for European culture, he said. I often say Macau is the most accessible part of Europe in the middle of Asia.
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