PUBLISHED : Friday, 24 January, 2003, 12:00am
UPDATED : Friday, 24 January, 2003, 12:00am

LIKE DESIGNER LABELS and fast cars, fine wines are increasingly in demand among China's growing middle class.

Locally-made wines - traditionally grain-based tipples such as rice wine - are losing their lustre for some in a country seeking the best the West can offer.

In the restaurants of Shanghai, wines from Australia, California and Chile are being consumed as another sign of status, as individual wealth rises. Many people are also now seeing red wine in particular as a healthy option to spirits.

Furthermore, with China's entry into the World Trade Organisation, import duties on foreign wines are rapidly declining.

According to Nick Pegna, Hong Kong-based director of sales for British wine merchants Berry Bros & Rudd, the growing interest in wines from outside of China is just another part of the westernisation of the economically sound mainland.

'People are drinking foreign wine, particularly in Shanghai, in the same way they used to drink it here [Hong Kong].

'For the status. Consumption is increasing, but not at the pace some people are saying. It is not a sudden increase. It's gradual,' Mr Pegna said.

The most popular wine in China was red, he added, and he saw Australian labels currently being the most popular, primarily because the Australian government has put more time in to the official paperwork needed by importers.

'The people I have seen drinking wine in China are not that choosy, but they want to be seen to be relatively upmarket,' said Mr Pegna.

'They will pay from 150 yuan [about HK$142] up to 350 yuan a bottle.'

Mr Pegna said the increasing consumption of foreign wines had been noticeable in the past two to three years. 'It goes hand-in-hand with the [financial] changes in people's lives [as China has opened its capital markets, enjoyed a strong economy and joined the WTO]. There is a demand for a more international lifestyle.'

A premium Chinese wine, on the flipside, can sell for an average of 40 yuan to 50 yuan a bottle. But with more foreign wines on the market in China, the price for an international drop is falling.

According to Beijing-based Montrose Food and Wine's managing director Carl Crooke, an increasing number of foreign wines are being bought in supermarkets and ordered at bars. Montrose imports 600 different wines.

A bottle of French table wine in a supermarket could be bought for 'not much more than 50 to 70 yuan a bottle'.

Mr Crooke said that about 50 per cent of the foreign wine market was French, with Californian, Italian and then Australian wines taking up the remaining share.

He said, however, it was difficult to measure the total consumption of foreign wines compared to domestic wines as the imported wines were a mix of bulk - wines brought in to the country in 22,000-litre containers and then bottled with Chinese wines or just bottled as is - and the foreign-bottled wine.

'I would say that we're looking at a 30 per cent growth in the whole imported wines market,' Mr Crooke said.

He added there were about 500 million litres of wine consumed a year in China and imported wine only makes up a small percentage of that.

'But the imported wines are a dynamic sector,' he said.

'The big story that I see is that the Chinese consumer is quite health conscious and we're seeing a downturn in spirit consumption.

'Wine consumption, however, has doubled in the last five years and the growth in the consumption of foreign wines is quite dramatic.'

In fact, Mr Crooke said that at state banquets now, a small glass of white spirit for the official toast is being replaced by a glass of wine.

He agreed that the Chinese were partial to red, putting that down partly to recent publicity which showed the health benefits of a glass of red wine.

Furthermore, the emerging middle class largely views spirit drinking as something for the working classes.

'They have bought their homes, their car and now . . . there is nothing like a display of fine wines in your home.'