For China's Newly Affluent, Imported Wine Is De Rigueur

china wine
Chinese customers make their way through the wine section of a store in Beijing, June 14, 2005. Consumption of European-style wines has grown dramatically in China's cities, by as much as 15 percent to 20 percent a year, according to some industry estimates. China's state statistics bureau says per capita consumption of such wine has doubled in five years. (Elizabeth Dalziel - AP)

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By Maureen Fan
Washington Post Foreign Service
Sunday, January 28, 2007

BEIJING -- Cocooned in a wood-paneled, members-only bar on the 50th floor of a private business club, Yao Yi, a corporate lawyer in Beijing, hunched over her glass, swirling and sipping a 2003 merlot from Washington state.

"It's quite young. So, not France. There's no Australian option here. Maybe we can choose New Zealand, it's close," Yao said, laughing during a blind wine-tasting quiz at Beijing's Capital Club.

In the end, Yao and her friends guessed that it was an American wine. They also got the vintage right, scoring five points for the team and more credibility for increasingly educated Chinese wine consumers.

Yao's interest in imported wine began five years ago. Now, critic Robert Parker's wine scores roll off her tongue as she compares the best of Napa Valley with wine from Australia's Barossa Valley. Over New Year's she spent more than $2,100 on 14 bottles of French Bordeaux.

It wasn't always this way. In fact, many Chinese consumers still treat wine as a ceremonial prop for toasting, sometimes downing an entire glass as if it were a popular Chinese grain alcohol known as baijiu. Selection of wine by the glass is still very limited in most Chinese restaurants. And wine is expensive, compared with beer and other alcohol.

But these days, the cost is part of the charm.

"More and more Chinese drink wines, because it's fashionable and a kind of social status," said Zhou Ning, market strategy manager of a Beijing-based real estate company whose ads often feature young couples drinking wine or beautiful women lounging with a glass of wine. "We include wine in our ads because we want to tell potential customers that people living in our apartments are elegant and cultivated, and they pay attention to quality of life."

This country has a growing urban middle class; experts estimate that roughly 500,000 Chinese earn as much as $64,000 a year, though exact figures are hard to come by. Meanwhile, the tastes of the newly affluent in Beijing and Shanghai have driven sales of a wide variety of luxury items.

Citing data from China's customs bureau, the Shanghai Daily newspaper recently reported that wine imports surged by 91 percent in the first nine months of 2006. According to industry experts at a conference in Beijing this month, consumption of wine rose 13 percent between 2004 and 2005, to about 564 million bottles.

The surge in imports is largely the result of an increase in bulk wine being sent from Australia, Chile and elsewhere in 6,000-gallon bags. That wine is then combined with local ingredients and sold as Chinese bottled wine, often with names such as Dynasty or Great Wall, experts said.

"It's all part of the luxury goods thing that's going on, why the men are buying Zegna suits and the ladies are buying Louis Vuitton bags. They've been traveling the world," said Don St. Pierre Sr., co-founder and chairman of ASC Fine Wines, the largest wine importer and distributor in China. "It's really starting with the new emerging middle class, and moving up to the richest people."

As wine becomes the latest fashion accessory, MBA students are learning about wine appreciation, executives are asking how to build private wine cellars and tastings have graduated from paper cups to glasses, attracting sell-out crowds.


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