Global Fine Wine Market: Follow the Money to China

(YahooNews) - Mike Veseth remembers well the tasting note of the very first Chinese wine he drank about 10 years ago.

“It was a cabernet sauvignon,” said Veseth, editor-in-chief of the blog “The Wine Economist.” “And the tasting note was ashtray, coffee grounds and urinal crust. It was exactly that.”

Since that pungent experience, Veseth said the quality of Chinese wines has increased dramatically in just a few years. China has not only become a substantial wine consumer and producer but a major player in the international fine wine market, eclipsing the traditional strongholds of Western Europe. The center of gravity in the wine world has shifted.

“Most of the wines that are being collected are the classified Bordeaux or the Gran Cru Burgundy wines,” said Veseth, author of “Wine Wars” and the forthcoming “Extreme Wine,” and a professor of international political economy at the University of Puget Sound. “But if we’re looking at the auctions, it’s not where the wines are, it’s where the money is. Just follow the money. And the money is increasingly in Hong Kong and China.”

The epicenter of the wine world has traditionally been France. And that’s where a rather unusual auction of about 1,200 bottles of wine, Champagne and cognac were offered last week from the cellars of Elysee Palace, the official residence of the French president. The auction – which saw prices at four times their estimates – raised close to a million dollars and was an austerity measure meant to replace costly vintages with lower-priced alternatives.