DAN'S WINE BLOG- CHINA A COMPLEX SITUATION

Friday, November 6, 2020

The premise behind the “dumping” enquiry is that Australia is “dumping” wine cheaply into China and this is affecting the local wine industry. Ironically the Chinese government, whilst well able to cast stones in our direction, is not (it would appear) to be capable of keeping a “tidy house” or sorting out its own backyard.

There was an item on the internet the other day by Vino Joy News about how they have just discovered 10,000 fake bottles of Chateau Haut-Brion in the southern city of Xiamen. At first glance it would seem that the Chinese authorities are doing their job, but the discovery only came after that famous First Growth Bordeaux Chateau, with all its resources had lodged a determined claim of forgeries with the Chinese authorities.

Link to Article:

https://vino-joy.com/2020/10/20/more-than-10000-fake-chateau-haut-brion-busted-in-china/?utm_source=DWN&utm_campaign=e10d19ef6e-DWN_CAMPAIGN_October_2020_COPY_01&utm_medium=email&utm_term=0_1787000e4c-e10d19ef6e-223157605

The problem with forgeries, apart from their impact on the sales, reputation and standing of the genuine winery, is that in some cases it is not even wine in the bottle – it can be coloured water, coloured tea or any other substance. In some instances, the consumption of a forged wine has led to the hospitalisation of the consumer. This conjures up memories of their “melamine” incident where in 2009 an unscrupulous company was mixing in powdered melamine into baby formula, resulting in several deaths prior to the arrest (and execution) of the company executive involved.

While wine forgery until recently was done on a fairly small scale it stayed out of the Chinese government’s radar. However, when you have 10,000 bottles of a wine that is worth nigh on AUD2,000 a bottle (you do the maths) we are no longer taking about petty crime.

We have all seen the images of “Benfolds Grange”, the forged Grange bottles, and we need to be aware that this phenomena is not limited to the uber expensive wines either.

Several years ago, when I was part of the team at the “South Australian Exporters Association”, one of our members found imitations of his wine in China. As a result we organised a meeting with then, Senator Nick Xenophon, regarding the issue to try to get the Australian government to leverage the Chinese government into acting on the rampant forgery industry. Alas it failed, and it seems since then the only time the Chinese are stirred into action is when a global powerhouse like Chateau Haut-Brion starts legal actions.

Why do I mention this? Apart from the damage it does to the real wine’s brand, there are two other reasons which should be of as much, or more concern to the Chinese government. First and foremost, as mentioned earlier is the possibility of illness or even death of its citizens. Secondly, these imitations erode the confidence of people in wine – if somebody drinks a shitty copy they would think, “If that is what expensive wine tastes like, I’ll go back to Baiju” – which impacts on both local and imported wines.

There is a significant preference for imported products over local products because of the on-going instances where the local product is either inferior or even hazardous.

So, the impact on the local industry (which has seen sales fall by 50% in the last 5-6 years) is much more likely to be from:

?bad experiences with phoney wines either directly or via friend and family.

?a lack of trust in the local product, and

?the fact that many if not most locally made wines are sub-standard compared to imported wines.

A fair audit of the imports of Australian wine will/would find that the FTA (Free Trade Agreement) lowered the price of Aussie wines making them much more competitive, especially against the European wines. That the average price per litre of imported Australian wine has gone up over the time in question rather than down, and that no “real” winery (as opposed to virtual companies buying bulk wine and tizzying it up) has sold wine at too low a price.

Isn’t it interesting that this complaint by an association of Chinese wine producers, members of which include the BIG 5 wineries which all have solid connections with the French wine industry, was filed just after we surpassed the French as the No.1 imported wine into China. Just saying……

Anyhow, have a great week, enjoy great wines and stay safe!

#Australianwine #wineexports #chinawine #qualitywine #premiumwine #winelovers