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| Photo: Courtesy Sotheby's |
Anyone studying Chinese wine industry won’t tire of cribbing about the cheap quality of wines that shows no signs or the need for improving; or the industry figures churned out by computers doing the double or triple counting. But Lafite has created history, going by the penchant of the super-rich to buy it at any price. At the current prices, all the Lafites of the world might be traveling to China soon, directly or via Hong Kong.
The stories, jokes and anecdotes about Lafite abound, especially in Hong Kong. From the incredible story of how a Chinese wine merchant could not believe why he was refused when he went to Lafite and offered to buy only the Lafite labels at a hefty premium or that the market price of an empty bottle of a Chateau Lafite ’00 fetches as much as HK $3000 (Rs. 18,000), many such stories are doing the rounds in wine circles.
At the International Hong Kong Wine and Spirit Competition that concluded yesterday, the hot topic of discussion has been the unnatural love affair the new Chinese millionaires have developed for Lafite. Says Fongyee Walker one of the judges who is a wine consultant in Beijing, has partially cleared her MW and conducts WSET wine courses, ‘the rich Chinese are obsessed with the thought of drinking the world’s best wine which they believe is Chateau Lafite. They believe Lafite adds another dimension to Luis Vuitton, luxury yachts and Lamborghinis.’
Interestingly, most of these nouveau rich millionaires who have made uncountable money in the fields like real estate and mining are uneducated and have no knowledge about the 1855 Classification of Bordeaux.
It is not that they have not heard of the other First Growths. Some of them do know it is owned by Rothschild family, but are not as smitten by Mouton- the first growth label owned by the other arm of the family. Latour and Margaux are also lagging while Chateau Haut Brion is at a clear disadvantage as most Chinese cannot pronounce the name correctly and avoid drinking it.
So impressed are the Chinese with Lafite that they refer to Chateau Duhart Milon-owned by the same owner- Baron Eric de Rothschild of Domaines Barons de Rothschild, as ‘Little Lafite’, says Fongyee, adding. ‘They would rather buy Carruades de Lafite (second wine of Chateau Lafite) than the Chateau wine of Second Growths-Cos D’Estournel or Pichon Lalande.’
What is the reason for the long lasting love affair with Lafite? ‘If I could have a dollar for every reason given to me for their charm, I would be a rich woman,’ says Fongyee. Most people give credit to X-factor which includes luck and being at the right place at the right time. But Lafite also gambled when it invested in the development of the market at the right time. Even the recent announcement of etching the letter 8 in Chinese (when pronounced it means ‘prosper’ and so is considered very lucky by them) is part of the marketing strategy. They are perhaps the only Bordeaux company that has the complete website in Chinese. They make regular visits and follow ups with trade tastings and have focused strategy for this market.
To take advantage of the popularity and to entrench themselves for the long haul, Lafite has also tied up with CITIC, China’s largest state-owned investment company, to develop 25ha of vines on the Penglai peninsula in the Shandong province, reports Decanter.
Serena Sutcliffe, Sotheby’s international head of wine says reportedly, ‘There’s a lot of speculation about why the Chinese like Lafite so much. People say it’s because the name is easy to pronounce in Mandarin. Actually, they like the taste; otherwise they wouldn’t pay such high prices for these wines.” Most of the wine journalists from China disagree. Apparently, the people who drink Lafite have no knowledge of wine, would drink it in any glass, with any food and without any idea of how to the taste. Best wines in the world, according to these nouveau super-rich, should taste like Latour.
Of course, like Louis Vuitton and thousands of other luxury products that find their duplicates in China, there are any numbers of fake Lafites or look-alikes available at any wine shop. They even carry catalogues with different fake labels that can be affixed on the bottle the price of which varies with the quality of the liquid. No wonder, the empty bottle of Chateau Lafite brings a premium, of up to US $300-400 in Hong Kong, bringing memories of the premiums on the empty bottles of JW Black in India which supposedly consumes more Scotch whisky than produced in Scotland.
What is the relevance of this love affair for India? There is also a huge population of nouveau rich and the super-rich who spend a lot on the high-end luxury goods. Like China which had no knowledge or availability of wine till a few years ago, these people are not yet aware of wine as a lifestyle product or the status symbol fine wine represents. Once they are catalysed, the boom may be unprecedented and the market will be transformed overnight.
However, there are two major differences. The high taxes in India are a big damper-even in Hong Kong the explosion has taken place after the government waived off duties in February 2009. The second reason is that in India, even the super-rich look for some value. Unless the brand is impeccable-as one discovered recently with around 160 Mercedes sold in the small town of Aurangabad in Maharashtra during a road show, the super-rich won’t rush for the brand-be it Lafite or Latour.
Soon after these two landmark incidents, there would be a rush to flood China with Lafite-through Hong Kong; there are carriers who act as couriers to deliver wine anywhere in China at a small premium to the duty free price. Yesterday, Acker Merrall and Condit, one of the premier US- based auctioneers with offices in Hong Kong, announced today the sale of 12 cases of Chateau Lafite at US $20,000 each-undoubtedly aimed at the Chinese market. With all the current hullaballoo, all the cases might be sold in a couple of days. There seems to be a new business opportunity – sourcing Lafite to sell to China. But if you are a connoisseur of fine Bordeaux wine, be advised to leave Lafite alone for the Chinese
Subhash Arora
Hong Kong
November 1, 2010 |