China and Wine

Thursday, April 14, 2022

The Chinese wine market is rather perplexing. The initial rush towards imported wines was quite understandable given the number of shonky, dangerous local products Chinese have encountered over the years – especially the melamine in the baby milk. During the last decade imported wine sales outstripped domestic sales, so much so that between 2014 and 2019 China’s wine production fell by 50% – given that in 2014 they were growing more grapes than what Australia did, the 50% drop was a massive decline.

Then in 2020 the whole scene started shifting again. Firstly with the arbitrary and punitive tax on Australian wine (40% of total wine imports), coincidentally just after we outsold the French for the first time, then Xi Jinping visited a wine region for the first time (Ningxia) and started to actively promote domestic wine over imported wine. Having experienced his stance/action on “the gifting” of wine in 2014/2015, many Chinese wine drinkers took this subtle hint and switched from imported wine to domestic wine, leading to a decline in total wine imports in both 2020 and 2021.

Other factors impacting on and changing the market, include not only the tightening on gift giving of wine, but also tighter import regulations, which have led to significantly higher levels of wine shipments being rejected by China Customs (including one shipment of Penfolds) coupled with a considerable slowing down of the speed at which shipments are processed and approved by them.

Another aspect of this rapidly changing market is that there is now a new phrase in China – “Guochao” (national tide) favouritism towards, and pride in, domestic brands, designs and cultures.

Guochao will be an increasing challenge/problem for countries selling wine to China – ergo not an issue for Australia thanks to Xi Jinping killing our wine sales to China with the arbitrary 212% tax, but it will be an increasing problem for most other countries. This will be a significant challenge to the newer comers like South Africa, Argentina, Greece, etc., who have not had time to build up loyalty amongst the older more stable wine drinkers in China. More mature aged wine drinkers have a disposition towards imported wines based on their wine drinking experiences and are simply substituting their favourite Australian wine with a wine from another well-known wine country/region – mainly France and Spain. However, the younger, upwardly mobile Chinese have no such proclivity and being good citizens they are following the government’s none too subtle nudge towards the local wines.  Not having experienced many if any quality foreign wines, they find the local wines quite acceptable.

A number of Chinese wineries such as Xige Estate in Ningxia have reported significant increases in sales over this last year. Xige doubled their sales and sold out of all of their back vintages.

Guochao is having a significant impact upon the millennials (1980-1995) and Gen-Z (1995-2010) as they reach drinking age. These consumers are more moderate drinkers than the older baby boomers. This along with the rapidly growing “she economy” (women doing the purchasing) mean that the main growth in wine drinking has been skewed towards the no and low alcohol segments of the market and at the “top shelf” end of the domestic wines. They see wine as “their drink” as opposed to the prior generations which mainly consumed Baijiu spirit.

The bizarre thing is that whilst overall wine imports have been falling, mainly, it would appear due to Guochao, Chinese domestic wine production has yet to see any significant increase, after having fallen by around 50% in the five years up to 2019. From this, one could possibly infer that the Chinese love affair with wine has peaked and is now waning. However, as it is the “mysterious orient” and such a complex market, I believe it is too early to tell “what the flock is going on”, other than to say to Australian wineries – Find another market/s for your wines.

Cheers, have a great week, stay safe and #chooseaustralianwine

STOP PRESS:  

Starting on Monday (the 18th) until Anzac Day (the 25th) there is going to be an Adelaide Hills Fire Appeal Auction for Bushfire Affected Wine Businesses.

Over 350 outstanding wines have been donated to the auction to raise funds to help wine businesses affected by the 2019 Cudlee Creek Fires. It is a long and costly process to recover from a fire in a vineyard, let alone the winery and storage sheds.

The auction will be conducted by Mark Wickman from Wickman’s Fine Auctions (see link below) and the auction will go live on the morning of Monday 18th of April.

It is for a great cause, so please check it out (when it opens & don't forget to register for the auction) and hopefully you will find some wine on there that you “must have” and bid accordingly. Cheers, Dan T

Wickman’s link:  www.wickman.net.au

This Week's Wine Review:

This week I am talking about dessert wines, an almost forgotten component of the wine world. The habit of enjoying a “stickie” wine with one’s pudding has unfortunately by and large disappeared. There are a number of reasons for this including drink driving laws, growing diabetes, diets, etc., but the end result is that fewer and fewer people get to enjoy and appreciate the delights of the lusciously sweet wines.

While I am a huge fan of dessert and fortified wines, I have fallen into the same trap and hardly ever serve a botrytis or fortified wine. The main exception is in summer, when daughter comes to visit and we enjoy fresh seasonal fruit with a great stickie after dinner – sublime!

Recently, I was in Bowral (NSW) and visited Centennial Vineyards as they have a reputation for great sparkling wines. I was delighted to discover that they also produce three excellent dessert wines.

They are:

Centennial Nouveau Finale Autumn Semillon 2021: A delightful Botrytis Semillon wine that is light-bodied yet rich and opulent, with lashings of delicious sweet peaches on the palate but does not cloy and finishes magnificently.

Centennial Dolce Classico N/V: A fresh and vibrant fortified wine with spadeful’s of complex and divine aromas – blackcurrant, cherries, toffee, a hint of herbs, etc., etc. Big and uber sweet on the palate but again like all good dessert wines it does not cloy on the finish.

►Finally and best – Centennial Raspberry Nectar: Fortified but still only 15% Alcohol this divine elixir is raspberry based with a big, rich, sweet raspberry bouquet that reminded me of raspberry picking when I was a wee lad.

The palate is sublime, like fresh raspberries with a goodly dollop of sugar piled on to them, yet not sickly sweet as the drying alcohol on the finish refreshes the palate after the sugar hit. Bloody gorgeous!!!

So how about leaving a bit of room in the old belly for a nice dessert or fresh fruit and a good dessert wine – a match made in heaven, which will sweeten your disposition!!

Cheers! Have a great week and enjoy a dessert wine along the way.

Website Link: www.centennialvineyardsrestaurant.com.au