Italian winemakers take on France in Chinese market
HONG Kong (Reuters) - Move over Lafite, the mighty Barolo is here.
That's what Italian winemakers are telling their French colleagues who have, in the years of China's ascent to economic prosperity, dominated the Chinese market with their Bordeaux and Burgundy vintages.
Marchesi de' Frescobaldi, a prominent Italian winemaker, is gearing up to please discerning palates in China, which remains a key market for wine firms.
"The Chinese consumers are becoming more and more demanding," said Lamberto Frescobaldi, whose best wines come from an array of appellations in Tuscany.
"They're looking for diversities of taste. The palate gets more curious. The Chinese palate is pretty much like that," he told Reuters. "I love Bordeaux ... But then you want to look at something else. Italy, the wines are a little bit more personal."
Frescobaldi said his winery's sales to greater China, including Hong Kong, saw a 20 percent jump this year due to increasing demand for vintages such as Ornellaia and Masseto.
Sales to China still rank ninth in the winery's global sales, but Frescobaldi hopes to raise this to number three over the next six to ten years.
The increasing demand for Italian premium wines has taken the sheen off top Bordeaux in the London International Vintners Exchange or Liv-ex, an exchange for investment-grade wine based in London.
The Liv-ex 50 Index, which tracks top Bordeaux including the five Five Growths (wine classifications), has fallen 11.3 percent year to date, while the Super Tuscan 50 Index, which represents Italian premium wines, has risen 0.9 percent.
"I think there's really a renaissance in Italian winemaking," said American wine and cigar critic James Suckling during a recent visit to Hong Kong.
He believes Marchesi de' Frescobaldi will lead Italy's premium winemakers in the charge into China.
"They make this amazing wine that's called Masseto," Suckling said. "In Asia it's just red-hot, it's a pure Merlot, that I often compare to Chateau Petrus.
"And then they make a beautiful wine, a Cabernet-based wine called Ornellaia which I compare to Latour. So they have a Latour and Petrus at the same time."
Frescobaldi said one thing that sets Italian wines apart is their acidity, which in Asia is a particular plus.
"Acidity is something often linked to something negative, (but) it enhances what you're eating. It cleanses your palate," he said.
"(In) Chinese cuisine often you caramelize the meat so the meat is already sweet, so when you match with a wine that has a little bit of acidity it cleans your mouth. This combination of acidity, a clean palate leaving a really dry palate, is a perfect match to most Chinese cuisine."
Other wine experts said the popularity was based at least partly on price, an important factor given the shrinking global wine auction market and recent economic slowing in China.
"Italy really doesn't make super expensive wines to start off with," says Suckling, who has lived in Italy for 14 years.
"Probably the most expensive wine would be $500 U.S. I think there's a lot of great quality wines, you know, wines you would compare to a first growth Bordeaux or second-growth Bordeaux or Grand Cru Burgundies."
Others are even less expensive, he said, with a wide range of drinkable wines, some priced as low as $10.
The continued drop in the prices of classified Bordeaux over the past year was "necessary" after the steepening in previous years as demand from Chinese consumers picked up, said Jane Anson, author of "Bordeaux Legends: The 1855 First Growth Wines" and Bordeaux Correspondent for Decanter.com.
Given the lower prices, there are still potential good investment possibilities in Italian wine.
"The key for collectors in wine is ageability - having the longest 'window of opportunity' for a wine to age well and develop in complexity - and more prosaically to be able to exchange hands while still in great condition," she added, noting that age-worthy Barolos would be perfect.
Suckling said that when Chinese demand picks up, prices of Italian wines are likely to be pressured upwards in the same way as Bordeaux and Burgundies in recent years.
The Super Tuscan 50 index has steadily fallen from its peak last July, when it rose as much as 6.2 percent, but the Liv-ex 50 Index languished with a loss of 11.2 percent.
Still, the market, especially in China, remains strong.
"There is still a healthy, growing future for European wines in China," said Anson. "Currently fine wine remains largely part of a corporate gifting culture in mainland China, but this is evolving."
(Reporting by Cathy Yang, editing by Elaine Lies and Patricia Reaney)
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