“Would you like the Great Wall Terroir with your sea cucumber, sir? Or may I recommend the Chateau Sungod?” Oenophiles in China might hear that muffled bit of advice as they study the menu. Among the many things made in China (alongside the trinkets and computers) is passably drinkable wine, often dressed up to be as French as its makers can get away with without sparking a trade war with Paris. Some of China’s winemakers are building French-style chateaux in order to have something more picturesque to illustrate the labels with than bits of broken wall. They are even buying vineyards overseas, in France and Chile among other noted wine countries. But China’s upwardly mobile increasingly want to drink more prestigious stuff.
China is the world’s fifth biggest wine market: drinkers will quaff 2bn bottles this year, about a third more than in the UK, industry watchers estimate. The market is dominated by domestic winemakers such as Yantai Changyu, Great Walland Dynasty. And they are doing quite nicely, thanks: revenues at Great Wall rose a fifth last year despite flat volumes, while gross margins at Changyu of 75 per cent are 13 percentage points higher than at French drinks group Pernod Ricard. Competition is getting tough as Chinese tastes develop. Imports of wine are growing five times faster than domestic production. In big cities, imported wines have a third of the market, the FT’s China Confidential estimates. Distributors like to sell imported bottles because they command higher margins.