The Chinese love affair with all things luxury is showing no sign of abating. And savvy investors are taking advantage of this and reaping rich rewards from companies who are supplying the top end of the market.
In the last five years, wine consumption in China has more than doubled. Together with Hong Kong, this area is the world’s largest volume importer of Bordeaux wines, and the vineyards are struggling to cope. Xavier de Eizaguirre, manager of Chateau Mouton Rothschild, one of the five Premier Cru estates, says that it’s difficult to stay fair to all your customers when the Chinese are prepared to buy your whole year’s production in one fell swoop.
Of course, this incredible rise in demand is leading to a major rethink of the industry, and more than one major European producer is preparing to develop operations in china.
In the past few days, Moet Hennessy has joined with Ningixia based SOE Nongken in China to produce high-end sparkling wines. The production will be from a 67 hectare vineyard and commence in 2014. It will be produced using traditional French methods and could well be sold under the Chandon label.
LMVH – of who Moet Hennessy is a part – already enjoys China as its largest market for cognac, and the market for champagne is growing year on year.
The expansion shows no signs of slowing down, in fact it is just the opposite as more and more Chinese businessmen and companies invest in French vineyards. And along with gaining production, the Chinese are also gaining expertise in the industry as they do everything they can to raise the quality of their industry.