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  • Aug 26, 2014
  • Updated: 11:06am
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Vineyard owners are hoping that China will become the next top wine producer

Vineyard owners are hoping that China will become the world's next top wine producer, although consumers still prefer foreign brands

PUBLISHED : Monday, 10 February, 2014, 3:45am
UPDATED : Monday, 10 February, 2014, 3:45am

At Wu Feng's private vineyard on the peninsula of Penglai in Shandong province, the grapes harvested last autumn have been pressed into wine and poured into oak barrels for fermentation and ageing. In the spring he'll start pruning and grafting new vines.

Since Wu's winery produced its first bottle of cabernet franc, a Chateau Reifeng-Auzias, in 2007, the businessman says his wine's quality is improving each year. But he has yet to convince many domestic consumers to choose his wine rather than those imported from France or Australia.

"It's really difficult to promote our wines. But I never doubt this market will get bigger and better for us," says Wu, a 56-year-old entrepreneur who also runs a chemical company.

China is the youngest player in the world's emerging wine-production markets - and has quickly become the world's fifth-largest wine producer. Industry experts estimate the nation will have the most land devoted to wine production and bottle more wine than any other country in five years.

"It's just like the Australia and Chile markets 10 or 20 years ago," Wu says. "Perhaps Chinese wine can become a well-received world brand in three decades."

Producing top-quality wines in China and selling them worldwide has become a dream for a growing number of Chinese entrepreneurs. Over the past decade, individual investors, state-owned enterprises and even leading winemakers from Europe have flocked to the country, selecting sites, planting their own vineyards and making wine.

Last year, Chateau Lafite Rothschild in France, one of the world's premier wine estates and owner of one of the world's most expensive wine brands, finished planting a 25-hectare vineyard and opened a winery in Penglai. It is growing varietals including cabernet sauvignon, cabernet franc and syrah.

Penglai, a place with more than a century of wine-making history, is considered to have the ideal climate and soil conditions for growing grapes. It's situated at roughly the same latitude as the Bordeaux region in France and Napa Valley in the United States, two of the world's best-known viticulture areas.

Chateau Lafite Rothschild is expecting to bottle the first Chinese-produced Lafite in three to five years, Olivier Richaud, general manager of the vineyard, told mainland wine magazine Taste Spirit. Richaud told the magazine that the company had spent more than 15 years hunting for the right place to plant grapes in Asia.

Another high-profile foreign player is LVMH Group of France, which has shown interest in two other popular vine-growing regions in China: Ningxia in the northwest and Yunnan in the southwest. The world's largest luxury goods conglomerate harvested the first batch of cabernet sauvignon and merlot grapes last autumn from its vineyard in the high mountains of southeastern Yunnan. It's also working with a Chinese partner to develop a 67-hectare vineyard and winery to produce sparkling wine in the Helan Mountains in Ningxia. So far, the group says it's too early to launch any wine brands originating from inside China.

In another move, Citic Group, the state-owned multi-industry conglomerate, is placing a big bet on Xinjiang in the far west.

Its wine arm, Citic Guoan, has become the biggest vine planter and wine producer in Asia, with a total of 10,000 hectares of vineyards growing on the northern slopes of the Tianshan range in Xinjiang. In recent years it has been selling its high-end products priced from 300 to 800 yuan (HK$380 to HK$1,015) a bottle in local markets.

"China's wine industry, from small private chateaus to big leading wine companies, is hoping to tap the high-end market," says Gao Xiang, a co- founder of Taste Spirit magazine in Beijing and a member of a wine culture committee of the United Nations. "But it may take another decade or two for China to become the next top wineproducing destination. It's because you will never know the potential of this land unless you dig deep into the soil."

Although wines from a number of China's private estates in Ningxia and Shandong have won prizes in various competitions and earned a solid reputation overseas, Gao says that their quality may not be as stable as other well-established brands in traditional wine-making countries.

So far, Gao says, most great wines are still from the "old world" - namely Europe - and few come from the "new world", meaning Argentina, Australia, Canada and elsewhere.

Wu Feng says he always believed that his home country could grow the best vines in the world.

Wu fell in love with wine and visited many vineyards and wineries in Europe while studying for a PhD in chemistry in Belgium in the late 1980s. His goal to build a vineyard in his home country started with a question: Why did such a big country like China not produce good wine? After returning to China, he and a friend from France put that idea into action in 2004.

This project has cost him at least 60 million yuan so far, yet the return is relatively small.

"But we feel encouraged to see the taste of our wines improving every year," says Wu. Since 2012, cabernet sauvignon, cabernet franc and syrah wines from Wu's estate have won several prizes from Britain's Decanter World Wine Awards and the China Wine and Spirits Awards.

Wu's wines have a different taste to those produced by leading European winemakers, which he says may be due to Penglai's climate and geographic conditions.

Ninety per cent of the wines from Wu's estate are sold domestically to high-end restaurants and clubs. The rest supply wine shops in France and the United States, where they are priced between €150 and €219 (HK$1,580 and HK$2,300) a bottle.

Wu and his partner plan to expand sales channels overseas this year and build their reputation in foreign markets first, which may later help boost their domestic sales.

"The China market is still a big challenge for us," he says. "We have no plans to put our wines in supermarkets or wine shops in China, as most individual consumers believe imported wines must be better than local ones. But the truth is our wine may have a slightly different taste, but is not inferior in quality."

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