China Revives France's Wine Industry

China's novice wine drinkers can be a pretty gauche bunch. To hide the actual taste of foreign wines, some dilute their Bordeaux with ice or, worse, Coca-Cola. After business people raise their glasses for a toast, they tend to drain them as if they were shots of tequila. Indeed, Ying Qunhua, China's elegant young first secretary of the Chinese Embassy in France, recently admitted during a visit to the limestone village of Saint Emilion in Bordeaux that her colleagues back home sometimes fear wasting a bottle of fine wine on "people who won't actually taste it."

But rather than mock or belittle these unschooled wine drinkers, the guardians of France's grandest grapes are asking another question entirely: red, white or rosé? Tired of declining international market share through 2005, French wine merchants are reaching out to China as a potential savior. That means overlooking Chinese nectar naiveté, as well as welcoming Chinese tourists to the wine-growing regions; Bordeaux recently began publishing a Chinese-language listing of its main châteaux. "It may not become the biggest market," says Jean-François Bourrut Lacouture, who sells high-end wines to spot markets in Shanghai, Hong Kong and Singapore, "but it will be near the top within 10 years or so."

It is already well on its way. The average Chinese has doubled his or her wine intake over the last five years. In 2005, the Asian giant eked into the world's top-10 wine-consuming countries. Last year Chinese wine imports doubled over the previous year, from 1.15 million nine-liter cases to 2.2 million—still just a fraction of the sweet local swill that most Chinese prefer. And with annual consumption at a mere .7 liter per person—compared with 57 liters in France—there's plenty of room for growth. No wonder wine-market analysts foresee a 36 percent increase in Chinese wine imports by 2010.

France desperately needs it. Local wine makers and sellers have been watching in dismay as French wine consumption sinks. France is still the world's biggest wine drinker, but the United States and Italy are set to sip their way to the lead within four years. Beyond high-end wines, the French have also struggled to sell to English-speaking countries in the face of aggressive and heavily consolidated competition from New World wine makers and distributors, especially Australia. Bordeaux wine maker Fabrice Dubourdieu, whose winery sells 80 percent of its product to Asia (mostly Japan but increasingly to China), is so confident of the Chinese boom that he spends an hour each day studying Mandarin. "For me, it is the future," he says. "What is at play is enormous. It is a sign of what is happening in many areas, but wine is at the forefront."

Oenophilia may be a natural extension of China's rise. Dozens of luxury hotels and restaurants are sprouting in major Chinese cities ahead of the 2008 Summer Olympics. China's fast-growing upper-middle class (with incomes of $5,000 to $13,000) was virtually nonexistent two decades ago; now it makes up 9 percent of the population. By 2025, the Chinese middle class is projected to include more than a half-billion people. And the Chinese government is actively encouraging people to switch from hard rice and other grain alcohols to wine, for health reasons as well as to spare crucial foodstuffs. No wonder taxes on many wine imports have plummeted from 120 percent to about 48 percent since 2001. Low-end imported wines now sell in China for as little as €4 or €5.

Luckily for France, the Chinese "still believe French wines are the best," says Shirley Tan of East Meets West Fine Wines, a Shanghai-based distributor. Multimillionaires in the Chinese diaspora—and, increasingly, nouveau riche mainlanders—often buy wines based on provenance rather than taste. "A bottle of Pétrus or a Château d'Yquem can sell at any price [in China]," says James Grégoire, owner of the Château de la Rivière in Bordeaux. "It is a symbol of wealth."

In the ultimate sign of China's arrival, the Spanish importer Torres China is bringing 300 cases of trendy Beaujolais nouveau—which must be drunk very young—to China by air this year. "Before, wine was mixed with ice or soft drinks just about anywhere," says Alberto Fernández, general manager of Torres China. "Now you see people in the main cities drinking with sophistication. It is becoming normal." In Bordeaux, that is definitely something to toast.