I’ve been mulling over a project with a close friend about the world’s best wines and the money behind them. The wine business is a risky one, fraught with intrigue and corruption, the allure of luxury and the appeal of simple day to day pleasure, and the world of finance has a stake in it for lots of reasons.
In today’s NY Times–Business section (remember, please, that this is where the best food stories are)–it was reported that the Chinese may add hefty tariffs to European wines entering their country to retaliate for the European Union’s decision to impose tariffs on Chinese solar panels.
Here’s the link: http://www.nytimes.com/2013/06/06/business/global/china-to-investigate-eu-wine-after-subsidy-and-dumping-complaints.html?pagewanted=all.
The article gave insight into the intriguing world of global trade, and more specifically it told of the Chinese involvement in the French wine industry. From the article: “In recent years, Chinese companies and business leaders have snapped up more than three dozen chateaus in Bordeaux, the wine region that has drawn the greatest interest from Chinese drinkers. The acquisitions involved mostly lesser-known vineyards among the close to 10,000 Bordeaux estates. Many of these properties have struggled in recent years to sell their wine in the traditional markets of Europe. Under the new Chinese owners, production in some cases is exported entirely to China, where the wine often is marked up substantially. Low-end Bordeaux that might sell for less than 5 euros, or $6.50, in France, might go for five or 10 times as much in China.”
The Chinese approach to wine production is rather unique: Rather than foster a refinement of the wine or have it compete on the global market, it treats it as a commodity to be controlled as a virtual monopoly for which more money can be charged.
Of course, this is better than what the article also notes as a trend in the Chinese approach to wine sales, and which the new tariffs could accidentally help: “Extra taxes could also help another, more dubious Chinese industry: the entrepreneurs who print fake French labels and slap them on bottles of local plonk, some of it almost undrinkable.”
Well, cheers, or as they say in China: 干杯!