Why China's wine will not soon rival Chile's

SHANGHAI, China — A group of Chinese businessmen dining recently at one of Shanghai’s most celebrated restaurants, spent more than $7,300 on food and drinks, including $1,500 on a bottle of fine Bordeaux. Then they diluted their glasses of wine with sparkling water.

That story, told by Jacky Goergler, general manager at Jean-Georges Vongerichten’s Shanghai outpost, explains why Chinese wines are not very good. Even though China is the sixth largest wine producer in the world, its consumers are not connoisseurs.

Even so, the wine list at Jean Georges at Three on the Bund, includes Shanxi province among selections from Bordeaux and Burgundy.

“If Jean Georges was in Paris not Shanghai, we would not have these Chinese wines on the list,” Goergler said. “It’s mostly tourists visiting China that are ordering those wines. They just want to try it. The white wines are drinkable, but the reds are only so-so.”

According to the San Francisco-based Wine Institute, China now produces more wine than countries such as South Africa and Germany, with their celebrated wine regions. But the vast majority of Chinese wine — 95 to 99 percent — is consumed domestically by largely inexperienced and indiscriminate wine drinkers. The result is mass production of poor quality wine.

But a few small vineyards, with the help of foreign wine companies, are attempting to lead a quality revolution, most notably the 12-year-old Grace Vineyard, based in central China’s Shanxi province. Judy Leissner, the Hong Kong-born CEO of Grace Vineyard, said that her winery has a distinct advantage over the competition — it doesn’t need to make a profit.

“My father started the winery in 1997. He started it for a very simple reason: he loves to drink wine,” she said. “The family has other businesses to fund the vineyard, so we can really commit to quality and when the wine is not good we can abandon it. That gives a huge advantage over other wineries, which rely on the business to generate income. Ultimately, I believe that commitment to quality will pay off and we will be profitable.”

Outside experts have helped Grace Vineyard in its drive for quality. A Bordeaux-based wine professor helped Grace find appropriate terroir. The company’s first winemaker was French and it now employs an Australian.

In addition, the winery recently partnered with Spanish wine company Torres to produce wines and continues to rely on Torres as it main distributor. “Last year, we jointly made a new white wine. It was the first time in China two families made a wine together,” Leissner said.

This connection to the wider wine world has been integral to Grace’s success, especially considering the lack of experience of most Chinese winemakers. “The winemaking industry is so new in China, so there are very few people who are well-trained and have experience,” Leissner said. "Even if they have a degree from a local university in winemaking, they haven’t tasted enough wine to develop an international palate. It takes a lot of time to train them.”

But some experts are skeptical that, even with devoted wineries like Grace Vineyards, the Chinese wine industry will experience quality revolution in the near future. Despite having a huge mass of land and diverse geography, China has an extremely inhospitable environment for growing wine.

“There aren’t many places in China where it is possible to have a long enough growing season to produce the types of grapes needed to make really high quality wine,” said Edward Ragg, head of China's only independent wine consultancy, the Beijing-based Dragon Phoenix Wine Consultants, the only independent wine consultancy in China, who is certified by the Wine and Spirit Education Trust.

Every region of China has distinct challenges. On the eastern coast, where most wine is produced, heavy summer rains force producers to choose between water-filled grapes that make poor quality diluted wine, or early picked unripe grapes, which result in an unpleasant bitter taste. In China’s drier western regions, winemakers face different problems. Early frosts, sometimes before the fall harvest, can ruin grapes and even kill the vines themselves. In addition, the cold winters mean farmers have to bury vine roots by hand, which adds about 25 percent to the cost of wines.

Finally, southern China’s humid climate makes it near impossible to grow grapes for wine, moving all production in the region to tiny, inaccessible mountainous areas.

So Chinese wine connoisseurs rely on imports despite the country’s large production volume.
“Chile has a much nicer climate for producing wine and has a much better growing season than China,” Ragg said. “There are very affordable Chilean wines that are available here in China that are way better than even the very good Chinese wines.”

Future technological advances and genetically engineered vines could help Chinese winemakers conquer their climate, but they won’t need to do that unless Chinese wine drinkers demand better wine. Chinese wineries sell out all the wine that they produce and even import excess wine from other countries to blend with their homegrown brew.

“They have a captive audience in millions of Chinese people drinking wine for the first time,” said Ragg. One of China’s largest wine companies, Great Wall, accounts for about 20 percent of the huge agricultural conglomerate COFCO’s profits, he added. “If they can sell the wine doing what they are doing, there is no real impetus for them to change.”

Despite the short-term challenges, China still has potential. Its young people are growing up with a much greater exposure to fine international wines and winemaking technology is quickly advancing.

“The trend will be Chinese wine drinkers demanding better domestically produced wine. The development of a more wealthy society will bring a greater attention to quality,” said Leissner. “Winemaking 20 years ago and today in a region like Bordeaux is extremely different. I think it will be like that in China as well.”

But for now, you might want to think twice before shelling out the big bucks for a Chinese vintage.

Read on to learn about importing wine in China.