Trade rows forgotten as French winemakers look to China

(Euractiv) - In a few remote corners of China, a world away from Beijing's allegations of European wine dumping, makers of such lofty French brands as Chateau Lafite-Rothschild and Dom Perignon champagne are investing millions of dollars to produce vintages they hope will put Chinese wine on the world map.

In a country where overpriced mediocre wines still define the domestic industry, the French are partnering with Chinese investors to produce super-premium wines for increasingly discerning drinkers at the market's top end.

The development comes as Beijing and Brussels are in talks to end their trade dispute over wine, with a settlement seen as likely after the two sides struck in July in a separate row over Chinese solar panel exports to Europe.

Beijing had launched its investigation into European wine sales after the European Union moved to impose steep import duties on Chinese solar panels.

Vintage prices

The French and Chinese investors will likely charge hundreds of euros per bottle when the wines start appearing in a year or two, turning out deeply rich reds and elegantly sparkling wines for wealthy Chinese drinkers who they hope will be proud to serve local vintages that are the equal of their imported collections.

"China deserves the production of great wines," said Christophe Salin, president of Domaines Barons de Rothschild (DBR), which owns the vaunted Château Lafite, Ch. Duhart-Milon and Ch. L'Évangile, among other French labels. "Without wanting to copy Lafite, we wish to produce a great wine on Chinese soil," he added in an interview.

DBR is investing 100 million yuan (€12.3 million) with partner CITIC, a state investment firm, to develop 25 hectares of vineyards in eastern Shandong province to produce super-premium red wine for the Chinese market.

Moët-Hennessy, the wine and spirits arm of luxury group LVMH Moët Hennessy Louis Vuitton SA, is also looking to make a top-end Chinese red and is planting 30 hectares of grapes in remote mountains of southern Yunnan province.