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11.22.2005

The Asia Effect

It's now becoming such a fact in the wine world that I'll be very reticent to post much news about it in the future, but in case you haven't noticed, wine is becoming huge in Asia. First of all, you have the staggering size of production going on in the region. Who knew that China was the world's 6th largest wine producer, producing more than Germany, South Africa, Chile, Austria, or New Zealand? A recent trade partnership between China and Chile, and talks of Chinese investment in the Chilean wine industry indicate China's interest in participating in the global wine market, not to mention hint at increasing demand. Experts predict healthy 20% annual growth rates in consumption as largest consumers of Beaujolais Nouveau in the world, passing even the United States and Britain in their imports of the fresh purple stuff.

And in case anyone in California thinks the Asia Effect is something that's happening elsewhere in the world, we're already seeing co-investment, collaboration, and consulting start happening between China and Napa.

What will happen when China and India can make wine that is as good as Yellow Tail and as easily available? The answer is: scary things. Let's just say I wouldn't be investing in the Australian wine market anytime soon. The late 80's saw the Asian Economic Boom. The late 00's will see the Asian Wine Boom. Mark my words.

Comments (9)

Tyler wrote:
11.22.05 at 10:17 AM

More wine on the world market is not what wine producers want--they want more consumers and that's what they're hoping for in China and India.

India might be the better bet for rising consumption as a Reuters story talked about it yesterday.

Wine and democracy? A more fruitful pairing?

11.22.05 at 11:21 AM

Do you think that rising demand from asia could suck up the supply?

Mithrandir wrote:
11.22.05 at 11:26 AM

I suppose "scary" depends on who you are. As a pure consumer, I think more producers is a good thing.

I look forward to the day when I can by a drinkable bottle with a cute dragon on the label for $5. Not so much because I'll be drinking it, but because I think it will be good for wine, economically. I firmly believe that in order to grow the market, we have to grow the low end.

Beer has it's plonk, it's Fat Tire and its microbrews. Wine has microvintages, and its quality volume producers, but we're weak on the low end, in that there is very little successful branding. Yellow Tail is a start (and a good bit less offensive than Bud/Coors/Miller).

boyd wrote:
11.22.05 at 11:32 AM

Who cares what producers want? From the prospective of a consumer, I want more wines to choose from and if they happen to be from China with Pandas on the label. Then right on! More competition and choice in the wine world is a good thing. Especially, if it contributes to keeping the wines I enjoy affordable.

I am aware of the fact that if I am the only one buying the wines of a particular producer I like then he is likely to go out a business and then I will be forced to drink the red’s red like everyone else. So while I do not want my favorite producer to go out of business, I do not want him to be so successful that he must either price his wares beyond my means or potentially compromise his product to meet demand.

So while Alder, you may fear the dragon’s rise on the worlds wine scene, I anticipate great things. Never before has so much good wine been available to so many. Any producer that enters the world arena should only be a threat to those that are making an inferior product at an uncompetitive price. As far as producers are concerned, as long as they are producing a good product at a reasonable cost/price and are able to make it available to consumers then they should do fine. Existing wineries and import/export companies that are establishing partnerships and facilities in these emerging areas have recognized this as an opportunity to be at the forefront of future successes of the wine world.

And just a little thought about winemaking and democracy. From my experience, many a winemaker’s winemaking could be described fascist.

Joe wrote:
11.22.05 at 2:34 PM

Interesting topic, particularly because I've recently had a ton of Chinese and Japanese Booze recently (read new girlfriend from Shanghai how came to the US via Japan). I have to say that there are some really, really interesting beverages that I look forward to being able to get more readily. I only wish I could pronounce them!

Tyler wrote:
11.22.05 at 7:04 PM

Hey don't get me wrong--a global glut keeps prices low for consumers and that's a good (nay, great!) thing. I am just skeptical whether China and India are going to be exporting wine of any quantity any time soon.

For the last ten years or more, the wine trade in Europe (but also the US to some extent) has pinned their hopes on rising consumption rates in overseas markets, particularly Asia. Where is VinExpo 2006? Hong Kong. And it's not for finding great wine exports from China--it's for offloading more (European) wine in Asia!

Alder wrote:
11.27.05 at 4:42 PM

Joe,

Thanks for the note. You should start a blog about interesting booze from Asia!

jon wrote:
12.27.05 at 7:57 PM

Has anyone been able to find Indian wines from Grover or Indage in the United States? I am desperate to try these two labels.

Alder wrote:
12.29.05 at 10:03 PM

I haven’t tried.

Have you looked at www.wine-searcher.com or www.winezap.com ?

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