Mike Veseth remembers well the tasting note of the very first Chinese wine he drank about 10 years ago.
“It was a cabernet sauvignon,” said Veseth, editor-in-chief of the blog “The Wine Economist.” “And the tasting note was ashtray, coffee grounds and urinal crust. It was exactly that.”
Since that pungent experience, Veseth said the quality of Chinese wines has increased dramatically in just a few years. China has not only become a substantial wine consumer and producer but a major player in the international fine wine market, eclipsing the traditional strongholds of Western Europe. The center of gravity in the wine world has shifted.
“Most of the wines that are being collected are the classified Bordeaux or the Gran Cru Burgundy wines,” said Veseth, author of “Wine Wars” and the forthcoming “Extreme Wine,” and a professor of international political economy at the University of Puget Sound. “But if we’re looking at the auctions, it’s not where the wines are, it’s where the money is. Just follow the money. And the money is increasingly in Hong Kong and China.”
The epicenter of the wine world has traditionally been France. And that’s where a rather unusual auction of about 1,200 bottles of wine, Champagne and cognac were offered last week from the cellars of Elysee Palace, the official residence of the French president. The auction – which saw prices at four times their estimates – raised close to a million dollars and was an austerity measure meant to replace costly vintages with lower-priced alternatives.
“It wasn’t very important in terms of the amount of wine or the amount of dollars raised,” said Veseth. “Although people may have overpaid for these wines. They’re kind of celebrity wines. Auctioneers have said these wines are famous for being famous.”
A pair of Shanghai-based wine importers purchased one of two bottles of 1990 Petrus Bordeaux. Their winning bid: $7,560.
“It used to be said that the Chinese bought the label,” said Veseth. “It used to be said that China was where the French dumped their poor wines at prices that no one else would pay. But the Chinese consumer is very sophisticated now, in just a few years.”
Not surprisingly for the world’s biggest producer of counterfeit items, China’s fake wine market has also proliferated.
“There have been a number of wine competitions now that make a point of destroying bottles once they’re emptied because of their fear that some other wine in them could be sold to gullible Chinese collectors,” said Veseth. “The most valuable bauble in my own small personal cellar is an empty bottle of Chateau Petrus. That’s valuable only because some Chinese scammer is willing to pay quite a lot of money to get the empty bottle to fill it and sell it to someone as part of a scam.
“It’s unlikely that these bottles will ever be opened, or opened by anyone who could detect that the wines were correct or not. But I tend to view it not as a wine problem but a problem of things that are traded for their artistic value or their celebrity value: fake wines, fake Picassos, fake Dalis.”
China is not only a consumer of wine, but its own domestic production has escalated. The modern Chinese wine industry is about a hundred years old, though it initially only produced wine for the expatriate market. The country is now the fifth-largest wine producer by volume in the world. And though the wines a decade ago may have less than desirable tasting notes, there are “excellent” Chinese wines today, winning international awards, according to Veseth.
He said one region of note is Ningxia in north-central China. Moet Hennessy is developing a winery in a joint venture with a local partner, to produce a high-end sparkling white wine from locally grown grapes.
Even as wine consumption has increased in China, it has fallen in Europe.
“We all have this romantic notion of wine having a very special cultural significance in Italy, France and Spain, especially in France,” said Veseth. “But the rising generation doesn’t share that central point. For their grandparents’ generation, wine was really cheap calories back in the post-War days. But now wine is just another beverage, much like it is here in the United States, and has to compete with beer and soda and juice and water and all sorts of other things.
“As Europeans have become richer, they have consumed less wine and when they do consume it, it’s better wine. This creates a smaller wine market and a very small market for the least expensive, lowest-quality products.”