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22/05/2017

The rapidly changing Chinese wine industry

The rapidly changing Chinese wine industry – an Australian winemaker's perspective

China is a country where things move fast. I first visited in 2004, amidst the pre-Olympics building boom. This was when bikes were an essential mode of transport for most Beijingers; the bike lanes were congested and you could easily hail a taxi with the wave of a hand.

Thirteen years on, the bike lanes are a breeze to navigate and you need a smart phone to track down a taxi. That kind of transition is typical of nearly every aspect of life in China.

Over those 13 years I’ve had the opportunity to be involved in winemaking projects from the established wine region of Ningxia to the frontiers of Xinjiang, on the western border, travelling to China more than 40 times. One of the things that keeps me going back is a fascination with how quickly the industry is changing.

A decade ago Chinese wine production was dominated by state-owned companies such as Great Wall and Chungyu, which produced poor quality wines in large volumes. Now there are a multitude of stories emerging of Chinese wines winning awards at international competitions. So, what has changed in the last decade?

The demographics of the market have evolved rapidly in tier 1 and tier 2 cities. Urbanisation, aspiration and connectivity means Chinese consumers are savvy and discerning in all their purchases.

They have embraced wine consumption and invest enthusiastically in educating themselves. They think and drink globally and the imported wine category has shown strong growth.

For many of these consumers, wine is a new phenomenon – something they would not have seen their parents drink. Many buy most of their wine online.

The domestic Chinese wine industry clearly saw this change approaching. Driven by national pride as much as competitiveness and economic opportunity, the industry, strongly supported by the government, has embarked on a decade of ‘raising the bar’.

It has invested in new technologies, encouraged joint ventures between Chinese and international wine producers, and in 2012 Ningxia joined the International Organisation of Vine & Wine (OIV) as an observing member.

This has built a diverse wine industry and quality has improved markedly. The massive state enterprises, as well as smaller privately-held wine companies have established new vineyards, wineries and brands with quality at the forefront.

Privately-owned wineries to watch include Grace Vineyards, Tiansai (for whom I consult), Silver Heights, Helan Qing Xue, and Kanaan.

However, nothing is simple in China and there are many complex challenges, particularly in the vineyard…

This article originally appeared in the March/April edition of Wine & Viticulture Journal. If you are a subscriber you can access the full article on the Northeast Media app, or subscribe at https://www.winetitlesbookstore.com.au/shop/wvj/.

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WID 2017