Jonathan Beagle is a London-based independent wine broker with clients across Europe and Asia. He spoke with China Economic Review about the state of the wine market in China and Australia.
Q: Are Chinese wine consumption patterns different from those found in other markets?
A: I would have to say yes. You get a lot of one-off buys, and people who are looking to get business visas by importing a pallet of wine. Some of the same questions from Chinese clients also crop up over and over. A prospective importer sends an email that says, “I would like any vintage of Chateau Lafite, and I’d like 3,000 bottles.” But if you knew anything about importing these wines, you’d know that 3,000 bottles of Lafites would pretty much clean the market.
Q: How many Chinese consumers of high-end wine are drinking it because they like it, and how many are using it as a status symbol?
A: It’s impossible to say. Personally, in terms of wine appreciation I think China is currently in a very similar position to where Japan was just before its bubble burst. They had a period where they all wanted wines for the prestige. But then the recession hit, the fashion moved on, and what remained were the 5-10% of people who said, “I quite like this beverage, I’d like to learn more about it.” Japan today has a very knowledgeable group of connoisseurs who are willing to experiment and actively look for interesting wines.
Q: How do Australian wines stack up against European wines?
A: Australia has its prestige wines at the top of the market, but even their lesser wines are perceived to be very, very good quality. They far outstrip French equivalents for the same price. They are also very accessible wines that drink nicely when they are young – European wines historically have had to age before drinking. Those factors all helped Australia to build market share in the 1990s. But thanks to improvements in winemaking technology and a somewhat warmer climate in Europe, the Old World wines are becoming more approachable in their youth as well. So it becomes a question of which style you prefer, rather than which wine is simply better.
Q: What challenges do Australian winemakers have trying to break into the China market?
A: There is this view among winemakers that if they just produce good wines, they can fit into a niche market in China. It’s not that simple. At the end of the day, the question is: Will those Australian producers be able to make a wine that’s twice as good as the local wines, charge twice as much and convince a lot of Chinese to switch to it? It’s a very difficult thing to do.