Unbottled: A foreign reporter misrepresents China’s wine industry

By Ma Huiqin

Tim Johnson, the Beijing bureau chief for McClatchy Newspapers, wrote a blog post this week and cited an anonymous source – purportedly a Chinese winery executive – whose claims include that 80 percent of wine bottled in China is imported bulk “garbage.” The post has been picked up by several influential sites, including Wine Business International. There is little doubt that China’s wine industry has problems, ranging from the misrepresentation of vintages by some firms to a lack of consistent quality. But exaggeration by Johnson and the source he cites, described as a “heartsick chairman,” does not help the situation. Here is a section by section look at the post:

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Wine could be the next category of consumer product to face charges of major fakery.

A little more than a year ago, I wrote an article saying that Chinese vineyards commonly fib about the vintage of their labels, and even about whether what’s in the bottles is actually wine or sugar water with some food coloring, alcohol and grape juice thrown in.

If you open a bottle labeled “wine” from a major Chinese winery, its content is from grapes. True, the grape quality might not be high, but the bottle does not contain “sugar water with some food coloring, alcohol and grape juice.” If grape sugar content is too low, sugar that produces the equivalent of 2 percent of alcohol may be added, as allowed by the OIV. But this is far from the haphazard witch’s brew that is suggested in the article.

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I noted that Chinese vintners commonly mix foreign bulk wine with local wine, and consumers are misled about what they drink.

The word “misled” is misleading. By law, a wine labeled as coming from a specific region should include a minimum of 80 percent of grapes from that place. Otherwise, as with most blended wines, there is no obligation to indicate grape origins. An example of a regional wine: Dragon Seal’s Huailai Reserve. Note: A comparative example is wines that blend grapes from different years and thus do not carry a vintage, with Champagne being a well-known example.

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Still to be resolved is whether local winemakers can mix bulk wine imported from countries such as Spain, Chile, Australia and Argentina with their own wines without telling the consumer. Such bulk wine can sell for as little as 40 cents a liter.

There is nothing wrong with blending per se. Wineries worldwide do it to improve quality. And again, a Chinese winery, unless selling wine from a specific region, is free to decide whether or not to indicate the wine origin.

Second, given the global annual wine surplus, we should not assume cheap wine is poor wine.

Finally, the author unfortunately fails to indicate what percentage of wine is bought at the 40 cents per liter level in contrast to other prices for imported bulk wine, thus we lack useful context.

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Bulk wine imports to China climbed 121 percent last year, hitting nearly five times the volume of imported bottled wine. Industry experts say most of the bulk wine goes into the bottled wine of China’s three big vintners – Great Wall, Dynasty and Changyu which label their wines as products of China.

A purchasing executive with a foreign supermarket chain operating in China, who spoke on condition of anonymity because he doesn’t want to antagonize local vineyards, said of China’s homegrown wines: “I believe nothing on the label.”

Now along comes the heartsick chairmain of a vineyard in Hebei province who’s spilling the beans about what happens. A blog posting of the anonymous vintner is making the rounds on the internet, and a translation popped up on China Digital Times (unavailable behind the Chinese firewall).

Speaking anonymously is a good way to avoid taking responsibility. China is often criticized for lacking freedom of speech, but the Chinese wine industry is not taboo. For example, Susie Wu fiercely attacked Changyu in 2002 and Great Wall in 2004 about the authenticity of their wines, and used her own name. In a recent Cabernet case, many experts sided against Changyu. Frankly, Chinese wines may be far from perfect, but to say “I believe nothing on the label” is extreme.

As for bulk wine imports, they did climb last year, but according to statistics, they are far far below 80 percent of the market. As many people feel uncertain of official statistics, I asked several wine makers from different operations, and their estimate is 35 to 50 percent at most, depending on the year, i.e. the annual production of the wine grapes in China and the wine price in the international market.

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Here’s what he says in part:

According to the internal source, “wine made from grapes grown in China occupies only 20 percent of the Chinese wine market, and the remaining 80 percent is imported junk wine.” “The market size is about 300,000 tons today in China; however, only 20 percent is produced locally and 80 percent or more is from imports. What are the imports? They are ‘junk wines, so called ‘garbage-rank imported wine,’ just like the second-hand suits imported from Japan and Korea in the past. The compositions of these junk wines are unknown, and the quality and quantity of each gradient is difficult to monitor. Most of them are not qualified for the aging process or were manufactured during bad years for wineries.”

This paragraph raises more questions than it answers.

How did this source calculate the ratio of imported to local wine? Again, import statistics and the numbers provided by my own sources, which would take smuggling into consideration, indicate imported bulk wine makes up far less than 80 percent of the market.

Where does he get the figure that market size is about 300,000 tons? Again, in the wine industry, market size is commonly thought to be around 600,000 to 700,000 tons, with domestic production of about 450,000 tons.

What does he mean by “junk” wine that is not “qualified” for aging? Given developments in viticulture and oenology, the gap between good and poor vintages is increasingly small. In addition, wine being exported from countries such as Australian and Spain must pass quality controls before shipping. Finally, the vast majority of the world’s wines are consumed young and thus aging potential is irrelevant.

The statistical and anecdotal evidence in this paragraph is substandard.

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The Chairman admitted honestly, “I have no idea what my colleagues will say about this situation. However, as an entrepreneur who is passionate about the wine industry and is dedicated to creating a gold label in Chinese wine, I feel very pained to see this happen. Why do our Chinese consumers have to drink the junk wine that the foreigners do not drink?! Remixed wine occupies about 70 percent market share of the wine that is sold for under 30 RMB, 40 percent for that under 60 RMB and 50 percent on average for wine under 200 RMB. In particular, the wine sold at nightclubs (entertainment places) is extremely poor quality. (The manufacturers) add food coloring to dry white wine to make dry red wine.

Again, why is Johnson taking at face value an anonymous source?

As for this: “Why do our Chinese consumers have to drink the junk wine that the foreigners do not drink?!” Gosh! What a patriot and nationalist! You would think that people the world over are only drinking first-growth Bordeaux. The truth is that people everywhere drink a wide range of wines, including low-quality ones.

By the way, the statistics he provides above are false.

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I’ve visited a couple of vineyards near Beijing, including the Taillan vineyard that is was built with French investment and the Bolongbao vineyard that produces a high end wine.

But we generally never, ever drink Chinese wine. And it just boils down to one thing: I don’t trust what’s on the label.

Given that Johnson’s winery visits sound positive, I suggest he further explore Chinese wine, rather than be unduly influenced by rumors, prejudice, and faulty statistics, some of which he passes on in his own post. I think he can judge if a wine is nothing more that sugar water, alcohol, juice, and coloring.

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Also by Ma Huiqin
Lost in translation: A rose is a rose is a rose?
Red versus white: The grape grapple in China
Wine education in China: Campus edition

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