China woos wine drinkers

China’s wine production is growing so rapidly it could overtake Australia in the next three years, a new industry report shows.

A report by French wine exhibition organisers Vinexpo shows China produced 72 million cases of wine in 2009, up 28 per cent from the previous year.

Denis Gastin, a commercial wine writer who regularly travels to China, said the increase was driven by growth in the Chinese domestic market.

He said Australian consumers were unlikely to see bottles of Chinese wine hitting the shelves in the immediate future.

“Some Chinese labels have exhibited internationally and sold a tiny amount of wine,” Mr Gastin said.

“But that is not the focus of the industry at the moment. The motivation was more to show Chinese drinkers local growers could compete internationally.”

If growth in the Chinese wine industry, driven mainly by red wine, continues at the same rate the country will produce 128 million cases of wine in 2012, an increase of 77 per cent which would see it overtake Australia’s forecast of 121 million.

“Domestic demand for wine in China is growing so rapidly the local production is only just keeping up,” Mr Gastin said.

He said rising incomes and wine’s image in China were responsible for the increased popularity and quality of wine, with wine increasingly seen as a status symbol in the emerging middle class.

“Essentially there has been a style dimension, it’s a modern drink, when people go out they want to be seen to drink a specific type of wine,” he said.

“The volume of domestic wine used to be pitched at the lower-income drinking public but the market has moved past that now.”

Although consumption per head in China is still small compared to other nations, increasing demand combined with the country’s population of 1.3 billion means it could one day become one of the world’s biggest wine markets.

Wine Australia’s Asian director, Lucy Anderson, said the growth of China’s wine industry does not threaten Australian exports.

“Based on previous figures we should see growth in exports (to China) of about half a million cases in 2011,” she said.

“The Chinese wine market is growing at around 20 per cent per year and Australian export growth is tracking with it.”

Australia is currently the No.2 international supplier of imported wine in China after France with Aussie imports well known for their quality.

While wine production in most of China’s 600 vineyards was previously geared towards low-income drinkers and resulted in a lower-quality wine Mr Gastin says the quality is improving and the country can compete on an international level.

“New entrants are coming in with a determination to make quality wine and doing just that,” he said.

“At the recent Hong Kong International Wine Competition a couple of Chinese wines took gold medals, a couple silver.

“Wine quality is definitely on the increase.

“(But) our average is still a higher quality average.”

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The wine is flowing in China.

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