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11.09.2012  
 

Why China Needs Wine Imports

At Hong Kong Wine Fair ag professor explains the country's difficult grape-growing conditions

 
by Kate Lavin
 
 
Hong Kong
 
Professor Huiqin Ma, at podium, discusses the challenges of winegrape cultivation in China and how that makes the country a good market for imports.
Hong Kong—An international cadre of professionals seeking a toehold in the Chinese wine market looked to professor Huiqin Ma for advice during the opening day of the Hong Kong International Wine & Spirits Fair. Huiqin, who spoke at Sonoma State University in California earlier this year, is a wine and grape researcher and instructor at China Agricultural University in Beijing. Her presentation Thursday in Hong Kong helped explain the importance of wine imports to the Chinese market, and why domestic Chinese wine producers may be at a disadvantage..

While viticulture is a large business in China, table grapes dominate the industry. Since the 1990s China has seen a big leap in the number of acres planted to winegrapes as well as the amount of wine being produced domestically, Ma said. Still, several factors make winegrowing difficult in China, creating more opportunity for foreign wine producers.

Grapegrowing challenges
Most winegrowing regions in the world are located in coastal or Mediterranean climates, but much of China’s huge population resides along the coastline. The agricultural regions of mainland China are located farther inland, in the continental climate of the north and northwest. “The difficult growing conditions lead Chinese winegrowers to adopt practices that would surprise many in the U.S. and Canada.

“What does a Chinese vineyard look like in the winter? You do not see any vines,” Ma said. Winegrowers in China bury their vines for the winter to prevent freezing, as do some growers in the most northern parts of the United States and Canada. Ma said the process of getting the vines covered takes two to three weeks. Most challenging of all, burial must begin soon after harvest, elongating the already chaotic season. “You have a very short length of time. You need to harvest your grapes, finish your fermentation, prune them and then bury them…or your vines will be frozen,” Ma said.

After the winter is over, winegrowers unearth the vines under similarly tight deadlines. “The next spring you have to dig them up quickly because the temperature rises quickly. If you do it late, your grapes will start breaking in the soil,” Ma said. She estimates that the entire burying and unearthing process represents 35%-40% of the cost of practicing viticulture in China.

Another issue is that most of the work is done by hand, and there is a shortage of people to do the work. “People laugh about that because we have such a huge population. However, the majority of young guys go to the city to work in a factory where they make more money than in the vineyard.”

China is generally a dry country, and a lack of water is especially severe in the grapegrowing regions of northwest China. According to Ma, all grapegrowing in China is dependent upon irrigation. Vines are trained differently, and a lot of pruning is required.

‘More of an importer’
The difficulties growing winegrapes in China mean that, “In general, China will be more of a wine importer than an exporter,” Ma said. “There is a long way for the Chinese to go for quality improvement.”

Ma added that the availability of imports means Chinese consumers are able to compare a variety of wines to find what they like.

Hong Kong International Wine & Spirits Fair
Several hundred people attended Ma’s presentation, many of them professionals looking to break into the Chinese wine market. John Tsang Chun-wah, financial secretary for the government of Hong Kong, told guests at the fair’s opening ceremony that, “All the major wine regions of the world have a strong presence at the wine fair.”

This year’s 957 exhibitors represent 37 winegrowing countries and regions at the fifth annual event, which includes first-time participants from Denmark, Russia and Azerbaijan.

Fred Lam, executive director of the Hong Kong Trade and Development Council, which sponsors the fair, told guests that wine appreciation in Hong Kong continues to grow in step with the rate of imports by volume and value.

In 2011, the U.S. was the third biggest exporter of wine to Hong Kong by volume, making up 11.9% of the market share. Historically also ranking No. 4 for exports to Hong Kong by value, the U.S. jumped to third place in 2011, besting Australia with 6% market share by value. In 2012 figures collected through September, the United States had fallen back to No. 4.

Canada is the 23rd largest exporter of wine to Hong Kong by volume, but it ranks No. 19 in terms of value, owning 0.2% of the market share.

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