China Goes Sideways(2)
"For the uneducated drinker ... wine is fairly intimidating, and there is a tendency not to want to lose face where wine is concerned," Ragg said. "These first-time or novice consumers will opt for cheap Chinese wine ... taking solace in a Chinese product," if they're even willing to pay what's still an exorbitant price, in China, for booze.
Vintners in Italy, Spain -- and especially the United States -- end up caught in between the two groups of drinkers. They don't have the same luxury cachet as French labels, and they can't or won't compete for the $6-and-under market. While Italian, Spanish, and American producers have still enjoyed double-digit growth in their exports to China, they have struggled to maintain market share against French wines.
American wineries, in particular, have had a hard time convincing Chinese consumers that the land of maidanglao (McDonald's) and kendiji (Kentucky Fried Chicken) can crank out high-quality (and prestigious) bottles. In 2009, U.S. wine accounted for just 5 percent of the Chinese import market, according to Global Trade Information Services.
Of course, foreign vintners probably rushed into things a bit precipitously. Despite the massive rise in numbers, China's per capita consumption is still negligible. In 2008, according to figures from the Wine Institute, Chinese drinkers swilled 1.08 liters, trailing most of the developed world and plenty of developing countries too. The market is growing because the number of Chinese consumers dabbling in wine is growing, but the market won't become the monster foreign labels were hoping for until wine starts being paired with food, drunk on a regular basis and viewed as more than a novelty.
"The best analogy I can think of is the gold rush," said Richard Halstead, Wine Intelligence's managing director. "The forty-niners ... many of them ended up broken and bankrupt and a few of them ended up with fortunes."
To make matters worse, even for those speculators who are striking it rich, counterfeiters have begun doing a brisk business slapping foreign labels on domestic, mouthwash-quality wine. Some analysts estimate that as much as 70 percent of the Chateau Lafite floating around Chinese wine cellars is fake. Those forgeries extend all the way down the food chain. An American winemaker touring China last year found a bottle of Charles Shaw, or "two-buck Chuck," which is sold exclusively in the U.S. supermarket Trader Joe's, said Linsey Gallagher of the Wine Institute, an advocacy group for California vineyards.
Not that many Chinese wine drinkers would be able to spot the difference. Leave Beijing, Shanghai, or Guangzhou and the knowledge of and interest in wine drops off precipitously, even in a prosperous port city like Qingdao. Wang Miao, a clerk at Qingdao Foreign Wine Trade Center, laments, "Chinese people drink wine like they drink beer. Except for tannins, they know nothing about wine."
It's a warm Wednesday afternoon in Qingdao, and the Tsingtao Beer factory tour has already punched 2,000 visitors by lunchtime. But that crowd hasn't found its way up the block to the wine museum, a converted bomb shelter where the corridor leading down to an underground tasting room is deserted, save for some bored-looking janitors.
"You should have been here yesterday," Xia Lijuan, a bartender tells me when I ask where all the visitors are. I raise an eyebrow. "There were hundreds of people."
Eventually a middle-aged man and his teenage son sidle up to the bar to drink the complimentary wine included with admission. Luan Zhong, a 42-year-old policeman, says he began drinking cheap Chinese wines as a teenager. But watching Western movies and TV shows got him to trade in his tumbler for a proper wine glass and start drinking slower. He savors the last of his free glass of Chilean cabernet sauvignon as his son looks on with pride. Luan Zhong asks for my number, and then stands to leave.
"I'll give you a call next week," he says. "You can come to my house for dinner. Do you like to drink beer?"
