China's newfound obsession with wine.

Wine, beer, and other potent potables.
Aug. 8 2008 5:08 PM

Wineglasses Rising

China's newfound obsession with wine.

Acker Merrall and Condit. Click image to expand
An Acker Merrall and Condit wine auction in Hong Kong

A specter is haunting Western wine geeks: the prospect of 1 billion Chinese people besotted with wine. As China becomes an economic colossus, its increasingly voracious appetite for scarce natural resources will inevitably extend to the world's most sought-after wines. If even a tiny fragment of China's population acquires the means and desire to regularly drink the likes of Haut-Brion and Romanée-Conti, the effect on (already high) prices and (already tight) supplies will be profound. And, in fact, the balance of wine-buying power is already shifting eastward: Chinese collectors have furiously sought out one first-growth Bordeaux, Château Lafite; and Hong Kong, which recently lifted all duties on wine, is now poised to rival London and New York as a hub of the global wine trade. Of course, there is always the possibility that China could eventually slake its own growing thirst for cabernets and merlots. China has a long viticultural heritage, and on the back of the country's economic gains, the local wine industry is booming: China is now the world's sixth-largest wine producer. But output is one thing, and quality is another. Might there soon be truly fine wines bearing the "Made in China" label?

I lived in Hong Kong in the mid-1990s, just before the British colony was returned to Chinese rule. Hong Kong was a sophisticated city with a number of major wine collectors, but the mainland was a vinous frontier, and the tales of mainland wine culture that filtered out were wild (and often carried a distinct whiff of condescension): Stories of Château Petrus being mixed with Coca-Cola and similar crimes being perpetrated against other prestigious wines were widely circulated. 

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More than a decade later, a vibrant and increasingly savvy wine culture has taken root in China. The country's wine consumption jumped more than 50 percent during the first half of this decade and is on course to increase another 70 percent during the second half. These numbers have caught the eye of all sorts of Western wine luminaries, who have begun to take China very seriously. Robert Parker just paid his maiden visit, a trip that included a $2,300-a-head black-tie dinner held on the Great Wall. Acclaimed British wine writer Jancis Robinson went to China in March and came back a believer; her popular Web site is now being translated into Chinese. And last summer, I saw Bernard de Laage, the marketing and communications director for Château Palmer, a Bordeaux third-growth, just before he headed off on a trip to China. I assumed his itinerary would be limited to the obvious destinations: Beijing, Shanghai, Hong Kong. But it turned out he was doing tastings in Wuhan, Taiyuan, and Qingdao. In an e-mail last week, de Laage told me that he is returning to China in September and will be visiting Dongguan, Xiamen, and Shenzhen. Evidently, the wine bug has spread far beyond the China's biggest and most international cities.

But it is not just the enthusiasm of Chinese wine buffs that is attracting all this attention; it is their rapidly growing purchasing power. Boris de Vroomen, the managing director of Moët Hennessy Diageo Hong Kong Limited and the chairman of the Hong Kong Wine and Spirits Industry Coalition, recently estimated that Hong Kong buyers account for as much as one-quarter of the wine sold at auction these days and that 40 percent of the fine wine sold by merchants in London goes to collectors in Hong Kong, mainland China, and Macau. In an effort to bring this business home, the Hong Kong government scrapped import duties on wine and beer in February. Three months later, New York's Acker Merrall & Condit, which has topped the U.S. wine auction market four of the last five years, held its first-ever sale in Hong Kong, and the response was so exuberant—the total take was $8.2 million and several record prices were set—that it immediately scheduled a sequel for November. Two other leading houses, Zachys and Christie's, are also holding auctions in Hong Kong this autumn.

But there is more than enough Chinese money to go around, a point underscored at the recent Auction Napa Valley, an annual charity benefit renowned for its high quotient of celebrities (Oprah attended this year's event, and Jay Leno emceed it) and the lavish sums paid for trophy wines. Back in the tech-bubble days, it was Silicon Valley moguls who caused the biggest stirs; this year, it was an Internet entrepreneur from Shanghai named David Li, who ponied up $500,000 for six magnums of 1992 Screaming Eagle, California's most sought-after cult cabernet sauvignon. "I love Screaming Eagle," Li gushed to the Wine Spectator. "Napa Valley wines are the best in the world."

I am delighted he thinks so, and as a Franco-centric wine drinker, I only wish Mr. Li could persuade other Chinese oenophiles to focus on Napa rather than Bordeaux or Burgundy (an even more alarming prospect, given the minuscule quantities of wine produced there). Alas, for most Chinese collectors, France is the touchstone, and Bordeaux especially—so much so they've even started to buy wineries there. Last January, a Chinese firm acquired an estate called Château Latour-Laguens, in the Entre-Deux-Mers section of Bordeaux (no relation to Château Latour). One first-growth, Lafite, has become a particular obsession for many Chinese wine fans. Acker Merrall President John Kapon confirms the intense Lafite interest among Chinese connoisseurs, adding half-jokingly that it is getting to the point that "there doesn't seem to be enough [Lafite] to go around!"

It's for this reason that I and many other self-interested grape nuts are so eager to see China's wine industry flourish. China has been producing wine since at least the Tang Dynasty (A.D. 618-A.D. 907) and possibly as early as the Han Dynasty (206 B.C. to A.D. 220), when the first vinifera grapes were known to have arrived there. In the late 1970s, after Mao's death and the opening of China to foreign investment, Rémy Martin, Allied Domecq, and a handful of other Western liquor companies teamed up with mainland partners to establish wineries in China. The facilities were more modern than any China had ever seen, and the wines they turned out were the first "Western style" ones to be produced there. (Chinese wines were traditionally syrupy and sweet; these were comparatively taut and dry.) Recent years have seen the rise of a small number of boutique estates that aim to produce upscale wines with international appeal and that are using foreign consultants to help them achieve that goal. 

The splashiest of these, Grace Vineyard in Shanxi province, was founded a decade ago by Hong Kong-based tycoon C.K. Chan. It includes a replica of a French château, and its signature wine, the chairman's reserve (presumably not named for Mao), is a Bordeaux blend that currently sells for about $60 a bottle. In all, there are about 450 known wineries in China, with vineyards stretching from Inner Mongolia to the Yellow Sea. Within this expansive zone is a dizzying array of topographies, soils, climates, and grapes. There is no reason to think that China can't make cellar-worthy wines; the question is where and with what varieties, and that sorting-out process is now well under way. Confidence is certainly high: There is now even a company specializing in tours of China's wine country.

Two years ago, U.S.-based importer Bartholomew Broadbent acquired a 50 percent stake in Dragon's Hollow Vineyards, a winery in Ningxia Hui, an autonomous region 600 miles west of Beijing. Broadbent boasts an impressive wine pedigree (his father, Michael, is the legendary former head of Christie's wine department) and has experience working in unlikely places (he also represents Lebanon's fabled Château Musar). He says that the area in which Dragon's Hollow is located was identified years ago by Jess Jackson, of Kendall-Jackson fame, as an area rich in viticultural promise. But realizing that potential is no simple task, particularly in such a remote part of China, where Westerners are still a novelty and fine wine is an alien concept (in part because the region has a large Muslim population and alcoholic beverages are shunned by many residents). Dragon's Hollow owns 1,600 acres of vines, the first of which were planted in 1997. It employs a winemaker from New Zealand and also has a team of 10 locals working in the vineyard and the cellar. "The biggest challenge," says Broadbent, "is teaching them to make wines that suit the Western palate. They've never tasted Western food and there is no wine culture. They've absolutely got the land and the climate to make great wine; it is just a matter of training."

Dragon's Hollow is one of the few Chinese wineries marketing its wares in the United States. Broadbent sent me three of its wines to sample: the 2005 Dragon's Hollow cabernet sauvignon, the 2006 riesling, and the 2006 chardonnay, all of which have a suggested retail price of $12.99. The chardonnay had an attractive floral kick to the nose and a nice, lemony crispness on the palate. The riesling was subdued aromatically but also delivered a good thwack of refreshing citrus flavors. The cabernet, on the other hand, was lean and green (i.e., the grapes were not sufficiently ripe). None of the wines will be win a gold medal (or 90-point rating) anytime soon. But as Lao-tzu might have said, the journey to thousand-dollar wines begins with a single sip.

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