Winemaking, drinking rising in China, India and other countries

April 15, 2010

ASIA IS NOT ONE of the first places that springs to mind when it comes to winemaking. The region has historically shown little interest in cultivating grapes for wine, largely because its population is more interested in getting its buzz from drinks like soju, sake, beer or whiskey. Even the wine they do drink tends to be rice based, or made from fruit other than grapes.

As might be expected, Europe dominates the world wine market. According to the World Vineyard, Grape and Wine Report prepared by Trade Data and Analysis, Italy snagged the largest share in 2008, with 18.9 percent. France followed with 16.3 percent and Spain with 12.1 percent.

But what might be more surprising is the country that ranked sixth in the world wine market: China. With a share of 5.3 percent, China trailed the United States at fourth place (with 10.3 percent) and Argentina at fifth place (with 5.7 percent).

Between 2004 and 2008, China boasted the most significant increase in vineyard acreage compared with other countries, growing by 226,000 acres, or 19.9 percent, according to the report. Within those same years, it also increased its wine production by 23.9 percent, running second only to Chile with 32.7 percent.

Other Asian countries have been showing remarkable increases in vineyard acreage, including India, which expanded by 170,000 acres, or 5.6 percent, between 2004 and 2008.

Apparently all the talk about the health benefits of wine has had an impact. Many Asian countries that once snubbed their noses at wine suddenly started coming around, including Japan, whose consumption doubled during the “red wine boom” of 1997 and 1998, according to a report by the USDA Foreign Agricultural Service.

In Hong Kong, last year’s elimination of a 40 percent excise tax on wine boosted the country’s imports considerably. In November, the Hong Kong Trade Development Council hosted its second annual International Wine and Spirits Fair, with more than 520 exhibitors from 34 countries and regions participating, twice the number from 2008.

That’s not to say the business of wine comes easily in Asia. The quality of wine in China, for instance, hardly compares with the industry’s worldwide stalwarts. People in China also tend to knock back the cheap stuff, often mixing it with soda to make it go down smoother. In India, quality control is an issue, and improper storage of wine at the wrong temperatures has often led to spoilage.

In South Korea — one of the biggest alcoholic beverage markets in the world, according to a 2008 USDA report — the challenge for winegrowers is the small fraction of the country’s population willing to drink their product.

“Consumers in general have little knowledge and experience about wine,” the report stated.

In terms of wine production, Korea is expected to remain negligible because “it lacks competitiveness in price and quality against imports,” the report stated. “High land price and unfavorable weather condition are the major impediments preventing any meaningful commercial local wine industry from evolving. Small amounts of locally grown table grapes are currently used to bottle souvenir-purpose wines or low-end products to be blended with imported bulk wine.”

Nonetheless, countries like India are trying to make an honest go of the wine business. Because of the Indian government’s high tariffs on wine imports, local wine growers seem to at least have a fighting chance, especially with the help of government subsidies of up to $160,000 toward startup costs.

JBC International, which last year put out a study on the Indian wine market, pegged the country’s annual growth rate in wine consumption to be somewhere between 20 percent and 25 percent. It further noted that while only six Indian wineries existed in 2000, the present number has grown to about 65, with about 85 percent of them in the state of Maharashtra, where Mumbai is located.

But even with all that promise, winegrowers must still contend with India’s cultural obstacles, including a constitution that empowers states to prohibit alcohol consumption. The constitution’s language was influenced by the country’s much beloved Mahatma Gandhi — a teetotaler.

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