CALIFORNIA WINEMAKERS VIE FOR THE EMERGING CHINESE PALATE

California wineries are attempting to spread their wings in China. As the largest wine consuming nation in Asia, although less advanced than Japan, Western wine-producing nations are lunging at this widely untapped market with enormous consumer potential. However, only 5.3% of the total volume sold in 2004 was foreign wine while imported spirits accounted for just 0.3% of Chinese consumption. So if California wine-producers can help develop the Chinese palate, than they’ll have a huge new market with a population of 1.3 billion. One in seven belongs to a high-end consumer class, nearly 2/3 of the entire U.S. population which makes it a very attractive market.

Reps from the Northern California wine industry have been pouring into China to explore the country and educate Chinese consumers and potential business partners about California. However, France, Spain, Chile and especially Australia have already made a mark in China with California lagging behind. Another problem is that American wine faces duties of up to 80% making it an expensive luxury. Most wine sold in China is domestic and costs $4 or less per bottle but it tastes terrible. In 2005 only $6 million in California wines made their way into the Chinese market, but it was an 8% jump from the prior year, according to the U.S. Department of Commerce statistics.