JOHANNESBURG, SOUTH AFRICA — It’s really just a case of wine-wine diplomacy. South African vineyards, buoyed by the trade row between Beijing and Canberra, have seen their exports to China more than double and are even producing wines specifically for the Chinese palate.
After China slapped a 212% tariff on Australian wines following a diplomatic spat over the origins of COVID-19 in 2020, winemakers in the rolling green vineyards of the bucolic Western Cape knew they could take advantage of the gap in the market.
“Australia was exporting $1 billion worth of wine to China in 2019, with a dominant market share of around 40% of all imported wine, there is obviously a big gap to fill and the South African category has benefitted,” Marcus Ford, Asia market manager for Wines of South Africa, which represents all local wine exporters, told VOA.
“So our exports to China have doubled over that period and the momentum looks to be strong,” he added, noting that last year South Africa shipped 458 million rand ($31 million) worth of wine to China, a 59% increase on the previous year.
Catering to the Chinese palate
Matthew Karan, who is South Africa’s biggest beef exporter, is now also exporting wines, which, as he noted, go well with a good steak. Karan’s AM Vineyards make their own blend, catering specifically to Chinese appetites.
“We go through a rigorous to and fro with China to make sure our product is for their taste,” Karan told VOA, adding that the Chinese prefer their wine low in tannins and usually favor red wines, red being a lucky color in Chinese culture.
Morné Le Roux, general manager for Swartland Winery, which also exports to China, agreed, saying Chinese wine connoisseurs prefer mainly dark red wines like “Pinotage, Merlot, Cab Sauv and Cab Sauv/ Merlot,” in an email to VOA.
“They do not like screw caps, only wine with corks in,” he added, also noting the packaging is of great importance with “red, black, gold and silver in the labels” preferred and green to be avoided.
However, tastes are changing, and the Chinese market is still quite young, according to Shanghai-based Ford, who said the country went from importing six million 9-litre cases of wine in 2001 to 60 million in 2018 — a tenfold increase in less than two decades.
“In the north of China, which has a relatively robust appetite for alcohol and strong alcohol, there’s a preference for rich heavy red wines, and in the south there’s more openness to lighter styles and white wines … and there’s a younger generation who’ve embraced white wines, sparkling wines,” he said.
But Yang Lu, China’s first and only master sommelier, said it is hard to generalize about a “Chinese palate” for a country of over a billion people.
“I don’t think there’s actually a Chinese palate exists, China is so huge, you know the taste of people, just like the Chinese food are so diverse,” he told VOA from Shanghai.
As for the future for South African wines on the market, “one of the really positive things that has happened in the past six months is some of the really big international retailers like Sam’s Club and Walmart have taken on new South African listings,” Ford said. That means they are being stocked more widely and smaller retailers may copy the bigger ones.
Chinese wine market trends
There are two main demographics of Chinese who are now getting into South African vintages, Ford explained. First, a very wealthy elite that started drinking only the most expensive Bordeaux and Burgundy for about $1,000 a bottle but are now exploring wines from other countries and looking for less expensive bottles of around $100.
“Then you’ve got curious consumers who’ve started on inexpensive French wines and had their experiences with Chile and Australia, and you know South Africa is very much on the radar for their next port of call,” he added.
It’s not all smooth sailing for South Africa though, le Roux of Swartland Winery said. “The potential in the market is very big, but building a brand is not easy. Most Chinese clients want their own label and want to be selling exclusively.”
“In China specifically, South African (wine) doesn’t command the respect we think it’s due,” Karan noted.
The pandemic and the future
The pandemic has also caused difficulties, Ford admitted, though prices have stayed much the same. Restrictions and lockdowns mean there has been less demand, with restaurants and supermarkets shuttered and people staying home.
“I think the biggest impacts in the short term at least will be supply chain problems with ports and customs facilities and those sorts of things being impacted, so there’ll be some disruption, from a logistics perspective,” said Ford.
Despite some hurdles ahead, sommelier Lu thinks the popularity of South African wines will continue to grow.
“We just reached a stage that the … general public were looking for more diversity and naturally being one of the most important wine-producing countries in the world, South Africa came into the picture,” he said.
But also, he noted, wines from the Cape are not only high quality, they’re also affordable.
“The wine consumer now they’ve become more savvy, they’re looking for a wine that can really give a bang for their bucks.”
Source: Voice of America