The great experiment of Capitalism combined with Communism in China may be struggling. And with it, the sudden slowdown of wine consumption in China has followed.
Wine and China intrigued me when I was contacted over the last couple years by some wine barrel import/exporters interested in buying up any and all wine barrels I could get my hands on. Part of the interest was coming from China. Of course, many others were also interested in used wine barrels, including furniture manufacturers, spirit makers and a sundry of beer producers – just to name a few.
Boom or bust?
The drought has brought a slow down here in wine country as grape crops have fallen off their high volumes of a couple years ago. Barrels are still in demand, but the market isn’t quite as tight as it was. And there has come a deafening silence from China.
Many folks including those in the wine industry thought that China would be a major boon to grape growers – and it was for a time – but now bottles of wine by the boatloads are languishing in warehouses or being sold off at fire-sale prices. The multi-billion dollar Chinese wine market has hit a big bump in the road.
Wineries and cooperages were popping up all over China with the idea being they could reproduce what the rest of the world was making to ease the extremely tight market their economy was creating. However, where once lay the Silk Road, now is lined with vineyards growing grapes that no one wants.
To be sure, the wine industry in China hasn’t stopped, but when heading fast and furious as the growth skyrocketed, now a more slower and moderate pace has taken hold. Award-winning wines have been produced from Chinese grapes and certainly a new influential and potentially dominant player in the vino industry is at hand. Still in its infancy, the once almost limitless development and expansion in China of wine has backtracked somewhat. Remember, wine is still a luxury in China.
In addition, the attitudes of foreign countries to China and their wine are still hard to get around. Although wine isn’t new to the Chinese people, this Asian region of the world was known for rice and not grape-based wines. This has made selling Chinese wines abroad more difficult.
A little side note. China’s first grape vines were planted in the late 19th century and came from none other than right here in California. The Chinese Civil War stunted any growth and then along with the Communist overthrow, the wine industry stagnated for decades.
Bigger or …
China is one of the Top 10 largest wine producing countries, and with its immense population and land size, will likely be in the top five before long – it may already be. The over-enthusiastic growth of wine in China will likely find a more moderate pace in the years to come – if we don’t plunge into a worldwide depression.
If the truth be known, the world has never really risen from the Great Recession and although China seems to have it’s own economy, its involvement with capitalism has brought it closer to the rest of the world. Yet, its burgeoning middle class is hungry for more – and that includes wine.
The future of wine and China is in balance just as the world economy teeters with a global depression. The fledgling Chinese wine market is here to stay as a major force; but, will it continue to grow and eventually dominate the industry as some expect?
Sources: International Business Times, Thirsty Dragon
Daryle W. Hier
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