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Toasting the future of China's wine industry

By Andrew Moody and Bao Chang (China Daily)
Updated: 2010-02-01 08:00

'No regulation'

"There is no regulation for wine classification in China. Chinese consumers don't really have any guide at all," she said.

Wang Xin, a 25-year old engineer, who works for a Japanese company in Beijing, says he says he thinks local Chinese wines are equally as good as many foreign brands. "Most of the red wines I drink are domestic brands because I think it is unnecessary to spend more money on foreign brands. In most cases it is difficult to distinguish whether they are any better on the palate," he said.

He is typical of many of the younger generation in having different tastes from their parents. "My father often drinks Chinese rice wine at business dinners since middle-aged people still prefer traditional Chinese drinks, " he said.

Wine drinking in China is still associated with affluence, however. Shen Qiang, marketing executive of Aussino World Wines, an Australian company established in 1996 and one of the biggest importers of wine in China, says most consumers have an income of between 40,000 and 50,000 yuan a month. "Chinese people still regard red wine as a luxury, whereas foreigners here see it as an ordinary consumer good," he said, adding this was reflected in purchasing behavior with Chinese consumers buying wines priced between 500 and 1,000 yuan a bottle and foreign consumers between 200 and 300 yuan.

"Although the price of imported wine is often three times that of its country of origin, the supply is inadequate to meet the demand in China," he added.

Ma Fei at Great Wall is not worried by the foreign competition since Chinese wines still hold a dominant market position and the wine market is growing fast.

"China has surpassed Japan to become the largest consumer of red wine in Asia and, according to some Italian experts, China is even expected to be the largest consumer of red wine in the world this year. There is, therefore, great potential for the development of the wine market in China," he said.

Huang at Euromonitor doesn't see young Chinese people's love affair with wine ending any time soon.

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