Wine Opinion | Chinese wine culture goes mainstream

The death knell for expensive wine gifts is clanging loudly and clearly during Beijing’s age of austerity. But China’s wine market is riding a wave of positive (although perhaps unintended) consequences. Gone are the days of seeking guanxi (business connections) with a bottle of Hennessy XO. Wine culture has gone mainstream and a new generation of Chinese drinkers are enjoying more wine with greater frequency.

Wine drinking is shifting focus from the tables of upscale restaurants to the comfort of people’s homes. Restaurants are still the most popular place to enjoy a bottle, but home drinkers make up a growing proportion of China’s wine market. These tipplers relax with a 250 yuan (HK$300) bottle a couple of nights a week, splashing out a few times a year on something more expensive. These – China’s first real wine consumers – will gradually, but comprehensively, fill the gifting gap.

Gift bans have hit hard for luxury brands and upscale restaurants. Sales of Hennessy XO, which was formerly a valued currency for businessmen and government officials, are down about 20 per cent in China – a market that was once its bastion of power. Instead of seeing red over the negative impacts of China’s graft clampdown, savvy suppliers and winemakers are excited about the future.

Speaking at the recent Wine in China conference in Hong Kong, Judy Chan, CEO of Grace Vineyard, divulged that her company’s sales normalised to single-digit growth in 2015, after more than 10 years of double- and triple-digit growth. Chan said that the rise of China’s first real wine consumers is a fascinating phenomenon for the wine industry to ponder. At last, wine drinkers are the people who are actually buying the wine. The average Chinese wine drinker these days is a less extravagant – but nonetheless aspirational – everyman or woman.

Aaron Lau, president and CEO of Cheil Greater China, speculates that the gift bans offer a chance for Chinese wine drinkers to discover authentic wine brands – wines that are produced for consumption. Certainly China’s parvenus will still seek brand names, but not the conspicuous logos of before. “Chinese people are starting to look for authenticity in the products they buy,” says Lau.

Chan agrees, saying with no hint of sympathy that she predicts a scaling back of the pretenders, as winemakers and suppliers who are just in the business to make a buck move on to the next moneymaking scheme. The real players will stay, meaning better quality wines in the market.