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Tuesday, November 23, 2010

Selling wine to China

Everybody wants a piece of the new consumer economy in China--can't let General Motors have all the fun.

Even though U.S. exports of wine overall have dropped with the tough economy exports to China (and Hong Kong) have increased substantially in the last few years.

Chinese investors recently bought Silenus Vintners and their vineyards in Napa Valley.   But it's not just California as Chinese have bought interests in Australian wineries and even French.   Foreign investments in California wines is nothing new, but in the past it's been primarily the French and Australians.

Does China have its own wineries?   They do but apparently the quality has a long way to go before the wines can be considered premium.   Maybe the Chinese hope to learn that from the French, Australians and Americans.   Bordeaux's Chateau Lafite is helping the Chinese develop a vineyard in the Shandong Province, already home to Cabernet, Merlot and Cab Franc vineyards.  Shandong has been called "China's Bordeaux."

The French have been importing wine into China for a long time and own nearly half of the import market.  The U.S. is only five percent.    China, of course, has a billion potential customers.  Many are very poor, some are part of the growing middle class, other are nouveau riche.  There is no wine culture in China, but that used to be said about the U.S.