DAN'S WINE BLOG- CHINESE CONUNDRUM

Friday, October 8, 2021

The French wine industry has been patting itself on the back for regaining its position as the most imported wine in China?(only after Australia was taxed out of the market).?They have gone from mid-30s percent market share up to a smidge over 50 percent?(Australia was 41.9 percent, now down to 6 percent)?and a whole raft of other countries have been doing?“happy dances”?at their sudden and unexpected rise in sales of wine to China. For example, South Africa and Argentina are both sprouting that they are?going?to focus on the China market for their wines.

BUT?they need to take heed of Australia’s cautionary tale. The Australian wine industry did nothing wrong and were eviscerated for political reasons.

There are some very early warning signs that the fiery dragon didn’t just start and finish with roasting Australia. The French (and others) need to take note there is a growing rumble that China is not happy about France taking a position in support of the Uyghurs. This alone could be enough for the Chinese, in their current titchy mood, to send the French?“to Coventry”.

I just came across another little sign that the Frogs may be headed for that big pile of?“doo-doo”.??French mega wine company, Castel Frères (the third largest wine company in the world), has just been fined in China for using superlative language such as?“best quality”?and?“most ripest”,?in its advertising.

The strange thing is that every single Chinese winery lays it on thick and fast using super-superlatives?AND YET?the very first ever winery to be fined was a foreign one, and a French one at that!

The Chinese really lay it on thick. In 2019 I stood in a vineyard just outside of Penglai City, that boldly said on a brass plaque:?“here grow the best grapes in the world”?– ironically it took three different people to be able to tell me that they were actually Merlot grapes – they knew they were the best but not what variety they were?(so typical Chinese). I wonder what Chateau Pétrus would say about that?

Other signs of a restless dragon are the fact that last year, Xi Jinping, visited Ningxia Province where the Chinese wine industry is busy expanding into the desert. While there he extolled his fellow countrymen to drink Chinese wine and he announced that the new 5-year-plan?(Yep, they still do those!)?includes a provision for doubling the area under vine in China. If this is even anywhere near achieved that would make China the third or fourth largest wine producer in the world.

Then very recently (4-6 weeks ago) the central government rallied against business drinking and started a crackdown, like it did on gift-giving of alcohol back in 2014. We saw how that disrupted the wine market, albeit temporarily.

So the signs that the Dragon is going to push back some more are that they are getting more and more titchy internationally by:

?Gradually reducing trade with democracies and increasing trade with autocracies.

?Looking to double domestic wine production.

?At the same time rallying against business drinking to curb consumption.

?The President promoting locally made wines.

?A subtle slowing down of customs processing.

?Fining a foreign wine company for misleading advertising

Hmmm, who wants to focus their wine sales on China now?

Well that’s it for this week. Stay safe, always?#chooseaustralianwine?and when possible drink?#emergingvarieties.??Cheers!