China's Changing Wine Demand Sees Bordeaux Attack Mid-Market

US, Australian, South American Wineries Already Occupy Mid-Market In China With the wine market in China evolving -- as more middle-class drinkers uncork modestly priced imports while demand for top-tier Bordeaux cools -- French winemakers are following their New World counterparts in looking to occupy the Chinese mid-market. As Georges Haushalter, the president of Bordeaux Wine Council, said this past weekend in Hong Kong, the moves are aimed at consolidating even more market share in China -- where French wines currently account for around 60 percent of all imports. As Haushalter told Xinhua, rising demand at auction in Hong Kong for top-tier Bordeaux, which pushed prices exponentially higher from 2009-2011, showed a marked shift this year as collectors and enthusiasts alike have diversified. Said Haushalter, "People start to realize there are not only five, but 10,000 chateaux in Bordeaux. This [has] diversified their choices." From Xinhua: "What we want to do is to help the Chinese customers learn about wines, so that they can discover new chateaux and diversify their tastes," Haushalter said, adding the main strategy for Bordeaux in the future will be focusing on the mid-range wines in the mainland market. In addition, some mainlanders' passion for Bordeaux wines has broadened from buying bottled wines to the chateaux, Haushalter said. There were only two chateaux owned by the Chinese in Bordeaux three years ago, while now there are 30, with 25 transactions having taken place over the past two years, he said. "I have met some of the Chinese owners, and they are really passionate about Bordeaux wines. They are also wise businessmen, because they see the potential of wine market, and take good care of their chateaux to provide more diversified products to the Chinese market," he said. Interestingly enough, it may be these now Chinese-owned Bordeaux wineries that have the best chance of succeeding in the middle market in mainland China. Leveraging both the prestige of the Bordeaux name and the local business savvy of their new owners (yet absent established and well-known labels in China), wineries like Chateau Laulan Ducos -- acquired last year by Richard Shen, owner of jewelry chain TESiRO -- have made plans to send virtually all of their production back to China to tackle the middle market. For Shen's part, following the acquisition he quickly made Laulan Ducos wine available at all of TESiRO’s 400 jewelry stores throughout China, shortly thereafter securing actress Zhang Ziyi as the “face” of his wines in China. Chinese celebrities, too, have jumped on the Bordeaux bandwagon, purchasing chateaux with the intention of plying their wares back home. Last December, actress Zhao Wei purchased a seven hectare St. Emilion chateau and functional winery for an estimated 4-5 million euros. While Chinese wine drinkers might not be familiar with names like Laulan Ducos or St. Emilion, they're very familiar with the faces promoting them. And though this type of celebrity-driven promotion might be sniffed at by top-tier Bordeaux wineries, it might prove highly successful for those in the mid-market.

China's Changing Wine Demand Sees Bordeaux Attack Mid-Market

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Published November 05, 2012

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China's Changing Wine Demand Sees Bordeaux Attack Mid-Market