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  • Guest contributor
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  • Guest contributor
21 Mar 2008

Lost in the clamour of denials from leading Chinese wine importer ASC Fine Wines as to the reported value of an impending fine from the China Customs bureau is a much larger story: the shifting landscape of the Chinese wine scene. ASC argues it will be much less than the figure quoted by a source inside the China Customs bureau.

 

Whether or not the full story ever comes to light is somewhat irrelevant in the face of the facts already known: the largest importer in one of the fastest growing wine markets in the world finds itself once again in hot water with the customs bureau.

 

As the dust has begun to settle and various other wine importers have stepped up to announce that their companies have been cleared as upholding the law by customs, one is left to wonder how greatly the Chinese wine market will be impacted by renewed customs vigilance, a burgeoning wine hub in Hong Kong to the south and more and more players arriving on the scene to try and grab a piece of the great China pie.

 

Major Chinese wine importers Summergate Fine Wines, Torres Wines and Palette Wines have all made statements to the effect that their books have been found to be in order.

 

But hard evidence is beginning to mount that there is something amiss. A baseline analysis of publicly reported export figures from the French Customs Bureau of still wine exports to China in 2007 shows a figure of 82.042 million euros (figure includes a two euro freight per 9 litre case adjustment). Compare this with China Customs Bureau information of French still wine imports into China during the same time period that shows a total of 59.912 million euros.

The question that begs to be asked: what happened to the 22.130 million euros’ worth of wine that seemingly left France but never made it to China? 

The real story though is one that transcends these figures and the plight of one company.  It is the tale of the Chinese wine market evolving at a pace that is even quicker than the exponential growth of its economy.  It is the story of a wine market struggling to find itself as corners cut in its early evolution begin to be rounded out and the players who exploited these loopholes feel the spotlight of an increasingly vigilant Customs Bureau shone upon them.  It is the tale of a booming wine market under unexpected pressure’ as its equally thirsty neighbour to the south repeals all wine tariffs making room for a global wine market on its southern border.

 

Where the story evolves from here is a tale to be told in the coming weeks and months as more bottles are uncorked and more companies further scrutinized. 

 

The undying facts though cannot be altered: China’s wine market is not growing in a merely linear way; it is exploding, evolving, being batted down and sprouting back up again.  It will be big, it will be dynamic, but what it truly will be, at the apex of its potential, is something we won’t know for a while to come.  What we do know though is that when the Customs Bureau comes knocking on the door of the biggest importer in town, the landscape is bound to change. 

 

We can feel it rumbling already.