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Mark O'Neill

The head of a giant state company is entertaining a foreign visitor and offers him a choice of three expensive French wines. Surprised and delighted, the visitor chooses Saint Emilion Grand Cru - which is served in a silver cup complete with a large block of ice.

 Embarrassed, the visitor explains that red wine should be served not chilled but at room temperature.

 The ice is removed and the two men enjoy the drink as the grower intended.

 That is one way people drink red wine in China. Another is to add Sprite, which is said to improve the taste and makes for more helpings. Serving white wine? Then add Coca Cola.

 Such home-made recipes are a mixed blessing for the foreign growers who hope Chinese will take to wine as they have to hamburgers, Kentucky fried chicken, pizzas and ice cream.

 They show that western wine has established itself as a luxury and prestige product but also that years of work lie ahead to turn Chinese into connoisseurs.

 Despite the unfamiliar taste, wine has become popular among a small group of urban consumers, mainly between 20 and 35, over the past two years.

 Demand has risen due to higher incomes, a desire to try smart Western things and an official campaign to promote wine in place of rice liquor, because it and beer consume 17.5 million tonnes of grain a year.

 You are no longer supposed to be served rice liquor at official banquets.

 To meet this demand, domestic wine output will rise this year to 450,000 tonnes from 300,000 last year, 220,000 tonnes in 1995 and 180,000 in 1994.

 A national meeting in Qingdao last month forecast production of 2.6 million tonnes by 2007, with vineyard area rising more than sixfold from 163,000 hectares to 1.067 million.

 Imports this year have also risen sharply, with Beijing, Shanghai, Tianjin and Guangzhou reporting several-fold increases over 1996.

 Per capita domestic consumption of grape wine is 0.3 litres per year, against a world average of seven litres and 70 or more in western Europe.

 So much for the good news. The bad news for the foreign growers is import tariffs and taxes amounting to 121 per cent that make the cheapest import about 70 yuan a bottle, against 10 yuan for Zhang Yu, a popular local white wine, and 5.80 yuan for Erguotou rice liquor, 56 per cent proof, the favoured brew of the Beijing working man.

 Furthermore, as with cigarettes, there is widespread smuggling and fakes and there are rumours that Beijing will impose quotas on imports next year to protect its weak domestic producers who have far to go to catch up with their foreign competitors.

 China has 130 wineries, eight of them joint ventures, but less than 20 make more than 10,000 tonnes a year.

 Taking the optimistic view is Bernard Taillan, France's second biggest wine group, which both sells imported wines and plans to produce locally.

 It has set up a US$16 million joint venture with a Beijing company that is planting a 30-hectare vineyard in a city suburb.

 The first harvest is expected in 2000 when the area will be expanded to more than 1,000 hectares.

 The venture has set up a plant in Beijing to bottle juice imported from France, which is producing 500,000 bottles a year, rising to three to four million within three years. It will also open the capital's first specialised wine shop in the Sanlitun area at the end of September.

 It plans to set up China's first wine museum, together with the French and Chinese governments, near the Ming Tombs.

 The market is not stable, said Patricia Duhau, Taillan's project representative in her office inside Beijing's cavernous Workers Stadium.

 Some Chinese drink wine because they like it, some because it is fashionable, she said.

 If people spread the idea that wine is very good for health, the market could grow very rapidly. Equally, it could be the reverse.

 Her company sells its clients not only the products but also the wine culture - how to serve and to savour it.

 'The true production of wine in China is very ancient and has been forgotten for a long time. Now we must start again from zero - that is the excitement,' she said.

 Tapping the Chinese preoccupation with health, the company stresses in its marketing that the wines contain vitamins and ingredients that help to prevent cardiovascular and stomach illnesses.

 How is the message getting through?  Saite, Beijing's ritziest department store, offers local wines and imports, including Grand Vin de Chateau Latour (1976) for 4,800 yuan (about HK$4,416) a bottle and Chantefleur red and white table wine at 68 yuan. 'Since January we have been selling 300-400 bottles a month in Beijing,' said the Chantefleur saleslady in a smart red and blue uniform.

  Business is slower at the wine counter in the Wangfujing department store, which caters to a mass clientele of Beijing and non-Beijing people.

 Selling Western-style wine here will be a long-term job, said salesman Wang Min. 'You do not see many ads for wine on television, while there are so many for beer and rice liquor.' he said.

 'It is a question of taste and habit. You have to change that habit.' 



Mainland wine merchants battle expense and consumer ignorance