Will the purchase of Okanagan Valley wineries be next in line, and why? Lets say the word "WINE"

Vineyards uncork Chinese markets

Brian Sprout/Tourism KelownaAn emerging middle-class in China is buying up wine from areas such as B.C. Okanagan Valley, above, to show their wealth.

It’s not an uncommon scene to witness Louis Vuitton-toting businessmen dilute their $500 bottle of Hennessy with CocaCola or shoot back their glass of red wine like vodka in China.
With growing salaries and more disposable income, the wealthy elite of the world’s second largest economy are increasingly looking for the next big luxury item to show off their wealth – even if they haven’t developed the palates of true connoisseurs.
With top French wines fetching record-breaking prices, Canadian wineries are trying the sell their liquid gold in hopes of cracking an emerging market.
Winemaker Holger Clausen knows a thing or two about taking risks. The high-stakes poker player made his fortune playing Texas hold ‘em and invested his winnings to build Aces Winery in British Columbia’s Okanagan Valley.

“I have two passions in life – poker and wine,” said Mr. Clausen, who last month showcased his selection of red wine at a consumer trade show in the port city of Ningbo, about a three-hour drive from Shanghai. With a translator by his side, Mr. Clausen mingled his way through the crowd, telling his story about hitting the jackpot at noon and catching the red eye to harvest grapes the next morning.
The charm offensive proved successful. Aces’ 1,000-bottle shipment was sold out by midday. “We had nothing left,” he chuckled.
It was Mr. Clausen’s first visit to China, and he suggests it will be the first of many.
Re-orders came in twelvefold for his poker-chip designed bottles, which are selling for between $30 and $102 in China; a 30% mark-up from the retail price in Canada.
He is also looking into commercial production to handle the demand for upcoming trade shows in China in August and November, when top hospitality buyers, politicians and dignitaries converge to order hot-ticket items.
Mr. Clausen said he’s received calls in the past from Chinese companies, but none was the right fit until Vancouver-based export and import company, Pomer, knocked on his door.
Pomer’s parent company, Mascube, is based in Ningbo, a mid-size city known to be part of the ancient Silk Road and one of the fastest-growing income areas in China. Mas-cube recently launched Hoy Import Mart, a members-only wholesale club where business owners and clients pay as much as 50,000 RMB ($7,319) for their registration shopping cards.
“It’s like Costco, but for very rich people,” said Pomer’s office manager, Flora Wang.
“They don’t know Aces or big Canadian names, they just know Mascube. They just trust us, so we feel our responsibility is very huge. If the product is not good, our reputation would be destroyed,” Ms. Wang said.
Gift giving is a large part of the Chinese culture, with some companies shelling out 500,000 RMB ($73,340) for nicely wrapped and packaged gifts for their employees and clients during the holidays, explained Ms. Wang.
But tapping into the Chinese market is not that easy. Most drinkers still reach for domestic wines. Greg Berti from Peller Estates in Ontario’s Niagara region says about 28 million people in China buy imports. With no distribution channels in place, setting up shop can be difficult for newcomers.
Canada’s icewine – a favourite in Asia, could end up being the golden ticket into the Chinese market for this country’s vintners.
The cold, sweet drink, made from grapes handpicked during the winter in Ontario’s Niagara wine region and in British Columbia’s Okanagan Valley, is considered a luxury beverage worldwide. It first dazzled the Japanese, then the South Koreans and now it’s poised to do the same to Chinese consumers, said Randy Dufour of Vincor Canada, who handles exports for Canada’s No. 1 icewine producer, Inniskillin, which entered the Chinese market 10 years ago.
Mr. Dufour has been travelling to China since 1995. He says he’s seen dramatic changes through the years, with icewine starting out as a gift item, and now becoming a drink consumed at dinner banquets along with the French grand cru.
“During the trade shows in the 1990s, the Chinese were more interested in my POS system than the wine. They were fascinated by anything Western,” Mr. Dufour said. “The middle-class is emerging and they see wine as part of that image of wealth.”
A Credit Suisse report last year said the top 10% of Chinese household incomes have grown 255% since 2004.
It’s not uncommon to see wine drinkers chain-smoking during a tasting or pounding a glass of wine like a shot of baiju, a popular Chinese rice liquor that can contain as much as 60% alcohol.
“Fifteen years ago, people didn’t like the taste of wine and would mix it with something else; some still do,” Mr. Dufour said. “This generation may mix their Bordeaux with Coke but the next will drink it as Bordeaux.”
A bottle of Inniskillin’s icewine sells for $140 to $200 in China.
According to a report from Agri-Food Canada, Canada exported $8.6-million of icewine to China in 2009, and it remains the top export destination for the Canadian specialty.
The young wine market – with its inexperienced Chinese palates and growing disposable income – has created the perfect formula for Canadian winemakers.
That’s especially true in the rural or interior cities, where wine knowledge is not as sophisticated and purchase decisions are being based on decent price points – and the fact that red wine is believed to be good for your health in China.
Allan Schmidt from Vineland Estates Winery, which sits near the Niagara Escarpment, also launched his icewine in China 10 years ago.
“Ten years ago, you would have a really hard time to find someone in China to sell your wine, but all I have to do now is pick up my phone,” said Mr. Schmidt, who added his phone was buzzing with prospective partners in China during the interview. “Everybody wants to be an importer but no one wants to get into distribution.”