Grape Press: Hong Kong auction, Down Under downsizing, Gallo on China

Some China-related wine news from the Web…

Asian wine investors are still flush with cash, according to this post:

Wine lovers from across Asia showed their love for a fine vintage is recession-proof when they bid up to almost 40,000 US dollars for each rare bottle, auctioneers said Sunday.

One unnamed bidder bought three jeroboams of La Tache Vintage 1990 red burgundy for a total of 118,628 dollars at the auction held Saturday, according to organizers.

Another paid 274,718 dollars for a collection of 144 bottles from the same sought-after winemaker Domaine de la Romanée-Conti, working out to about 1,907 dollars per bottle.

The post states that some 300 “collectors and traders from Hong Kong, Singapore, China, Japan and the US” attended the auction, the second held by Acker Merrall & Condit in Hong Kong this year. The sales raised USD6.7 million, with the auction house’s president, John Kapon, cited as saying that 90 per cent of the 950 lots sold.

While the market potential of China for Australian wine makers is often discussed, some industry leaders Down Under see downsizing the wine sector as an immediate concern, according to this article:

Australia’s wine industry appears set for a major shakeup amid growing pressure from leading winemakers to slash production and cut the total number of wineries.

The push for industry reform involves calls for a 60 per cent cut to producer numbers and to trim actual wine production by 20 per cent within a decade.

The reforms, outlined to last week’s Wine Industry Outlook Conference in Sydney, included a push to halve the number of wines sold in Australia.

… Chief executive of Tahbilk Wines Alister Purbrick, said 1.75 million tonne crops could be sustainable in 10 to 15 years but it depended on the development of markets including China and Russia.

Can’t Australians simply drink more? A bottle in every lunch box…

Finally, in this article, Joseph Gallo addresses the issue of expanding into and competing with China:

Last year, Gallo exported more than 14.7 million cases of California wine to 90 countries around the world, and it plans to expand to Russia.

“We’re starting to make an effort into China. We think there’s terrific potential over there,” said Gallo, who recently returned from China. “We would ship our cases over there and have people distribute it. That’s our current plan.”

The Chinese, Gallo believes, “could become big wine drinkers because they seem to be very open-minded. They have some wine already (but they) want to adapt more to the Western styles.”

China has more acres of vineyards than the United States, and it is the sixth- largest grape grower in the world. Rather than seeing Chinese wine as a threat, Gallo called it an opportunity.

“Certainly the Chinese are very intelligent people and extremely hardworking. They’re very knowledgeable. They learn. There’s no doubt in my mind that 10 years from now their industry will really have improved. By the same token, I hope we’ll continue to improve.

“Long-term, that’s competition, so we’ll have to find opportunities. There are always going to be areas where we have certain advantages, or maybe there will be collaboration of some type. It’s hard to say how it could happen, but in evolving, changing markets there are those who see opportunities and capitalize on it,” Gallo said. “We’re confident that whatever evolves, we’ll be involved in a meaningful way.”

This one is worth a read simply for its insights into how the company was built – Gallo says that it didn’t even make varietal wines until 1974.

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