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Friday, June 20, 2014

Red China

For the first time in history, a country other than France is now the number one consumer of red wine.  The country?  China.  The Chinese drank nearly 1.9 billion bottles of red wine during 2013.  France, whose consumption of red wine fell by nearly 20% from 2007 – 2013, is now the second largest consumer.  The huge popularity of red wine by China is attributed in part to their cultural norms about color:   red signifies good luck and prosperity, while the color white suggests death and mourning.

The increasing consumption of red wine by China is reflective in the upsurge of French wineries that have been purchased recently by the Chinese.  Both Burgundy and Bordeaux have seen dramatic increases in vineyard purchases by investors from China.  In January, 2014 it was estimated that in Bordeaux alone there were at least 60 chateaux owned by Chinese---the actual figure is somewhat difficult to nail down as many of the transactions are shrouded in secrecy.  It’s not unusual for holding companies outside of China to purchase a chateau on behalf of Chinese investors, only later to reveal that the buyers were Chinese.

All of this has created controversy in France. According to the Wine Spectator, a Beijing businessman recently placed on offer of $164.2 million for a classified-growth in the Medoc.  The French seller pulled out at the last minute.  The reason for this is unknown, however, it is a fact that many French have mixed feelings about selling to foreigners….many feel the French heritage is under threat, while others welcome the increased demand for French wine in Asia.  Further adding to the chasm is the vast cultural differences, as well as the divergent business norms of the French and Chinese.

Now, for the good news.  The United States remains the largest consumer of all types of wine.

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