China's business taste for wine

Tom McGregor

For many Europeans and Americans, drinking is an art form worth savoring. Wine gets served for special occasions or with delicious meals. Wine connoisseurs love to taste, smell and learn the special history of each bottle they drink.

Nevertheless, say the word "wine" to China's wealthiest business people and they are more likely to ponder new investment opportunities.

Some might consider that crass, but the wine industry is a business just like any other, which needs funding for its chateaux's, technical upgrades for wineries and a more efficient logistics network to ship bottles to consumers worldwide. Chinese investors are boosting cash flow for many of those involved in the industry.

Yet some Europeans have complained about the Chinese newfound passion for the elixir, claiming they're acting "over-the-top" and inflating prices. They contend the Chinese do not comprehend cultural sensibilities for wine consumption.

"French wine connoisseurs are up in arms over China's nouveau riche setting their sights on Burgundy's finest, expressing fears that they are paying inflated prices for fashionable wines," according to the Daily Telegraph of London.

It added, "local wines and experts claim that wealthy Chinese are more interested in splashing out and speculating than appreciating great quality wine - which has already led to price bubbles hitting Bordeaux's top grand crus."

The skeptics ignore that the Chinese spending spree is creating financial benefits for the wine community. Local tourism in the Boudreaux region has witnessed a dramatic upswing. Cash is pouring into local hotels, restaurants and shops. The Chinese seem happy to throw their money around, so why should regional businesses fret over that?

Additionally, wine inflation hasn't harmed anyone, since the brands of wine they're buying were already expensive to begin with. You can still buy cheaper wine in the marketplace. If the Chinese are willing to pay triple the price for a bottle why should a seller wish to stop them? One would assume that the big-spending Chinese should make French winemakers and hoteliers happy.

Besides, the nouveau riche in China are not only purchasing expensive bottles of wine, but they are looking into buying out vineyards in France, California or in their native country.