China no longer an ‘El Dorado’ for wine traders

A dramatic slump in demand is putting paid to China’s reputation as an ‘El Dorado’ for wine trading, one French importer has said.

Prices for some imported fine wines in China have been cut by up to 75% 

As the South China Morning Post reported that Chinese wholesalers are cutting the prices of certain imported fine wines by up to 75%, Pierrick Fayoux, the marketing manager of Shanghai-based French importer VGF China, told the newspaper:

“In 2010, everyone was screaming from the rooftops that China is the El Dorado for wine and you could become a millionaire by jumping into the business.

“Now wine is being sold below cost price, with some going bad sitting for long periods in poorly maintained warehouses. Some decent Bordeaux is selling for 15 yuan (£1.50) a bottle.”

In the UK, George Rhys, co-owner of Elliston & Southwick Fine Wines in Battersea, has reported that business from his Chinese customers has dropped off 30% this year.

Despite the Chinese blow, Rhys revealed that his exports to the biggest market in the world, the US, had risen by 20% this year, while business in the UK had picked up by between 10-15%.

“We sell direct to retailers in America and are confident the demand will not just be maintained but increase further,” he told the drinks business.

“In the UK, we’re selling a lot more Bordeaux cru bourgeois and petits châteaux in the £10 to £20 range. We don’t rely on en primeur sales so much now, but we need Bordeaux to be less greedy with their prices next spring for the 2015s.

“We needed a good vintage after a run of average ones but the prices have to be right. Otherwise, most people just can’t afford classed growths.”