Dynasty Wines Considering Vineyard Purchases In Australia, New Zealand, Chile, France

    Despite common belief to the contrary, a handful of Chinese wineries are working to ensure Chinese wine can sit at the table among the finest European or North American wines within a few short decades.
    Jing DailyAuthor
      Published   in Finance

    Tianjin-Based Company Could Spend Up To $150 Million To Increase Capacity And Meet Rising Domestic Demand#

    It's no secret that Chinese wines enjoy a less-than-stellar reputation among wine enthusiasts, owing mostly to a still-young infrastructure, little incentive for home-grown innovation, and the fact that many (if not most) domestically produced Chinese wines are blended with low-quality imported bulk wines. However, as Edward Ragg, a friend of Jing Daily and the founder of Beijing's Dragon Phoenix Fine Wine Consulting, pointed out in a recent piece, despite common belief to the contrary, a handful of Chinese wineries are working to ensure Chinese wine can sit at the table among the finest European or North American wines within a few short decades.

    From the article:

    Considerable column inches and millions of internet posts testify to the interest in mainland China as an emerging market of thirsty wine consumers. But as producers around the world eye up China as a key export market, they might also be keeping an eye on its potential as a winemaking country in its own right.

    With breaking the news of the joint venture between Château Lafite and CITIC (China's largest state-owned investment company) last spring, commentators are beginning to ask whether China will ever make significant quantities of drinkable, even fine wines.

    In China's Olympic year (2008), a group of Masters of Wine suggested that the country might, in the next 50 years, become a fine-wine producer. Others wondered if such crystal-ball gazing was tongue-in-cheek, given the generally lower quality of Chinese wine and the challenges facing viticulture there.

    Ragg goes on to name-check some of the wineries that represent China's greatest hopes for world-class wine at the moment, including Dragon's Hollow (available in the U.S.), Helan Mountain, Treaty Port Vineyards, and the Shangri-La Winery Company -- all smaller vineyards that can't hope to compete on a wide scale with China's "big three": Changyu, Dynasty and (the government-owned) Great Wall. However, despite their smaller size, the premium that these wineries place on producing wines approaching world-class quality seems to be having a broader effect even on the big guys -- who dream of someday branching out into international markets.

    This week, Dynasty announced that the company is thinking of spending around 1 billion yuan (nearly US$150 million) to buy overseas vineyards in order to boost capacity 43% to meet rising Chinese demand. As Dynasty chairman Bai Zhisheng told reporters in Hong Kong yesterday, the company is looking at purchasing vineyards in Australia, New Zealand, Chile or France. From BusinessWeek:

    “There are only a few available locations for vineyards in China,” Bai said in Hong Kong. The company is looking mostly to New World wine regions because they “have different harvesting seasons and that complements our production schedule as well.”


    Dynasty exports small volumes of its output to about 10 countries globally, including the U.S., France, Italy, Japan, the Philippines and Singapore, Bai said. The company also supplies Chinese embassies overseas, he said.

    “I want the best quality of the old world vintages and the production scale of the new world wines,” Bai said. “I want people overseas to taste Chinese wines.”

    Whether Dynasty's expected overseas land-grab ultimately results in better-quality wines that end up on international tables outside of Chinese embassies will likely take quite a while to see. However, it's encouraging to see that Dynasty is (at least publicly) interested in competing on quality-over-quantity rather than simply assuming that Chinese consumers will buy its wine because -- as winemaker Demei Li said in the Decanter article -- they "have little idea of how quality wines should taste."

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