Just read a fascinating post on Chinese wine on, of all places, a blog called Polish Wine Guide. The post is entitled “Wine racism?” [link no longer exists] but it is about a lot more than just wine. It is about how China is now producing some great products and of how Western companies that ignore that do so at their own peril.

The article is about the wine world’s reaction to Decanter World‘s having awarded He Lan Qing Xue Winery’s Jiabeilan Cabernet the award for best Red Bordeaux Varietal over £10. To quote the post, this award caused a “veritable stir in the wine community”  and the following points were raised:

  1. few people seem ready to admit that the Chinese wine won the Trophy on its own merits because
  2. China has no history of producing high-quality wine,
  3. few if any Chinese wines have demonstrated to reach so high a level of quality, and it’s implied that
  4. the wine was likely made with imported fruit and
  5. it’s a curious coincidence the award would happen at a time when Decanter is strongly increasing its business in China, and

The blogger points out that China is now the world’s fifth largest producer of wine, making more “bottles than Argentina, Chile, Australia, Germany or Portugal. He then notes that nobody “would make a story of a German wine winning a Trophy.” He then comments on how it is now a “truism that good commercial wine can nowadays be made everywhere” and that a winery from Thailand has already won two silvers and bronzes at international competitions in the last few years – yet that didn’t create nearly so much outrage.”

This blogger then (rightfully I think) gets all political about the dissing of China’s wineries:

Yet apart from unfounded prejudice, there’s another political aspect to the whole story that I found even more worrying. It’s that almost paternalistic looking down on China that I actually find slightly racist. It’s not racism on a personal level, but it is an undercurrent of negative bias that is deeply encoded into the dominant narrative here. China just cannot make a world-class Cabernet because it has no ‘wine tradition’ or ‘wine culture’. China can buy our bonds and Bordeaux, it can produce 99% of the world’s toys and shoes but when it comes to a precious product like fine wine, imbued with heritage and prestige, well it’s just impossible.

This is exactly the sort of post-colonial paternalism that was once used to dismiss Californian red wine until the Judgment of Paris revolutionised the wine world. Today no-one would think of suggesting a New Zealand Sauvignon or Chilean Syrah cannot compete respectably with a wine from France. Yet in a transformed form, that paternalistic approach persists. A very good wine from Montenegro, Georgia or even Greece is usually met with disbelief, and now the assumption that fine wine is purely a Gallic & WASP speciality is being challenged by Asia, provoking an outrage. You’d assume the wine world to be a very open-minded place but stereotypes run deep.

Many years ago, a client in the U.S. wine distribution business had the brilliant idea of importing Chinese wines for sale in the United States. His thinking (and mine) was that with Chinese prices being what they are, a $5 bottle in China would be the rough equivalent of a $10 bottle in the United States and a $10 bottle there would be about the same as a $20 bottle. To test out this theory, I bought a $5 and a $10 bottle from a very good Shandong winery and I brought them back to the U.S. and served them to my younger brother, who is quite the wine expert.  I told him the wines were from China and asked his opinion of them, without revealing their price points. He said the $5 bottle tasted like a decent $5 bottle and the $10 bottle tasted like a decent $10 bottle. In other words, these wines met their level but did not surpass it. Now I know one tasting is not conclusive, but in conversations with others who actually know wines, I hear the same thing. Now I know there are plenty of barely potable China wines, but having lived in France as a student, I can vouch for there being plenty of barely potable French wines (sold in plastic bags, no less) too. For unrelated reasons, my client chose not to import Chinese wines.

So what’s the takeaway?

I do not know the wine world enough to be surprised (or not) by its unwillingness by those in the more establishment wine countries to accept China. But I can say that it is not uncommon to see American companies go into China just assuming that their product or way of doing things is superior to anything China has and that alone guarantees them China success. A lot of what China produces/provides is of poor quality, no doubt about it. But if your plans for success in China involve your existing product or service always being better than whatever China can do, you probably won’t last there. Just this past week, a client who makes highly technical industrial equipment told me that when his company first went into China about five years ago, they figured their product would be far superior to anything produced by a Chinese company for the next ten years, easy. Now he says that Chinese quality is 90% as good, but the price is 30% less and he fears China will be at 98% within the next couple of years.

China quality is slowly rising and it is not rising at all uniformly. China may still be decades away from competing with the West in some areas, but in others, China has already arrived. It is obviously very important that you know where China is with respect to your particular business before you go into China planning to take over.

Do you agree?