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Growing prices of wines at table. |
On the Chinese mainland, the Lafite châteaux brand is making a spectacular mark. The price of a bottle of Lafite Rothschild now approaches Rmb8,800, a record high.
The famous French châteaux have all listed their futures prices in June or July, one year before the wines go to market, and prices have made big jumps for 2011.
Château Lafite is an example. The futures price for Lafite Rothschild 2009 hit Euros985, up 32% from a year ago and representing a 53% jump from 2005, a record. This price far exceeds the futures prices of other premier grand cru classés châteaux.
The published price for its second wine, Carruades de Lafite (called Little Lafite in China), is Euros68. Although its production cost was lower than in previous years, the price still leaped 79% from last year and 89% for the 2005 vintage.
Under the impact of soaring Lafite prices, red wines by Latour and Mouton, two of the five premier grand cru classés châteaux in France, also showed significant increases.
According to Pan Dixi, General Manager of Join and Joy, a Zhejiang chain of wine cellars, China's growing demand is an important reason for the prices rising; another is the fact that 2009 was a particularly good year.
China overtook the US as the biggest export market for Bordeaux wines outside the EU in 2009 and is playing an increasingly more important role in their trade.
Wine consumption on the Mainland is growing at an average annual rate of up to 20% according to official figures and China is expected to overtake Romania and Russia as the world's eighth biggest wine consumer in the next five years, with annual sales of imported wine exceeding Rmb10 billion.
Little Lafite prices up four times in three years
There are five premier grand cru classés châteaux in Bordeaux, including Haut-Brion and Margaux. There is not much difference between the quality in the harvests of the five châteaux, but in China, the prices of both Lafite Rothschild and Little Lafite are considerably higher than for the other four châteaux because consumers have heard more about Lafite.
Interestingly, the price of Little Lafite is even higher than for the major wines from the other châteaux. According to Cao Zongming, Purchasing Manager with Join and Joy, the retail price of a bottle of Little Lafite was about Rmb680 in 2007. This year the price has soared fourfold in three years, to Rmb3,500.
In the Bordeaux region, the best wines are produced from vines averaging 30 to 40 years old, and vines over 80 years old must be cut. The château often replace old vines with younger ones from time to time.
Châteaux like Lafite and Latour are making second wines from young vines to defray costs. Since demand is huge, Château Lafite has tried to circumvent the limitations on output by buying up vineyards in other parts of France and in countries like South Africa and Chile, allowing them to use the five arrows symbol on their labels.
As a result, so-called OEM Lafite wines with names like Lafite Légende and Lafite Saga are turning up in the Mainland market.
Little Lafite and other labels bearing the magic word of Lafite cannot compare with Lafite Rothschild in quality and cost. Little Lafite owes its skyrocketing price to Chinese drinkers' lack of understanding of the French châteaux.
Since Lafite is better known in China and the price of Lafite Rothschild already exceeds Rmb10,000, many people are content to have second best, hence the inflated price of Little Lafite.
Zhejiang drinkers consume 100,000 bottles a year
Zhejiang is one of the largest markets for châteaux wines on the Mainland. Statistics on red wine imports in Zhejiang show the province sold 100,000 bottles of Little Lafite in 2009.
One wine cellar keeper in Ningbo said although sales vary from year to year, the figure is still something to reckon with because only about 300,000 bottles of Little Lafite are produced each year.
Zhejiang drinkers consumed over Rmb200 million worth of Little Lafite last year.
Sales of Little Lafite continue to grow in spite of its soaring price. Supply is tight in cities like Hangzhou, Ningbo and Wenzhou. However, many in the industry are saying that the "diminutive" label is already over-priced.
from Eric Wang, Hangzhou Office
(Image courtesy of Xinhua News Agency)
