Lafite bounds ahead in China

Updated: 2012-06-01 11:03

By Xiao Xiangyi (China Daily European Weekly)

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French winemaker plans more outreach programs to better connect with consumers

For a few moments there was a breathless silence among the guests gathered at a recent wine-tasting session in Beijing. The silence was broken by the wine goblets clinking in unison as the guests hummed in appreciation of the fine vintage trickling down their palates.

For the gathered aficionados it seemed a priceless occasion, as they were among the select few who got a chance to sample the fine wines made by Domaines Barons de Rothschild Lafite (DBR Lafite).

Lafite bounds ahead in China

Michel Negrier says DBR Lafite will hold wine-tasting sessions in more Chinese cities. [Provided to China Daily]

Though the famed and pricey Chateau Lafite Rothschild and Carruades de Lafite were not part of the tasting session, the six untraditional wines from the DBR Lafite stable more than made up for their absence.

There is no doubt that the wine market in China is flourishing, considering that it is now the world's fifth-largest consumer of wine. More importantly, China has surpassed Britain and Germany as the largest importer of Bordeaux wine, according to the CIVA Bordeaux Wine Council.

Though the demand for fine wines is on the upswing in China, it has also brought with it some hurdles for foreign wine companies like DBR Lafite.

Buoyed by the record demand for its flagship wine, Chateau Lafite Rothschild, DBR Lafite has been expanding its market presence in China aggressively.

It is also taking steps to reach out to more consumers to prevent the rampant counterfeiting of its brands in China.

Last year, the French company exported 11 million bottles of Lafite wine worldwide, and of this, nearly 1.5 million were to China, its biggest market in Asia.

"The Chinese wine market has grown rapidly in the past decade. But the fast development has not created a well-educated market and many consumers are still unaware of the nuances of fine wines. It is important for companies like ours to educate the consumers if we want to nurture and sustain the market," says Michel Negrier, the export director of DBR Lafite.

Negrier says the various wine-tasting sessions planned by the company is a step in that direction.

"We are planning to showcase DBR Lafite wines at hundreds of tasting events like this, not only in the big cities, but also in the second- and third-tier cities and smaller towns. The more deeper we go, the more our efforts will be to educate the consumers," Negrier says.

Lafite first became popular in China after the famous Hong Kong movie star Chow Yun-fat uttered the lines, "Uncork me a bottle of 1982 Chateau Lafite!" in the hit comedy God of Gamblers in 1989.

Since then, the beverage has attained cult status and is being seen more as a symbol of status and wealth in China. But such widespread popularity and the limited stocks available every year also spawned a new industry of counterfeit Lafite wines.

Only 200,000 bottles of Chateau Lafite Rothschild wine are produced in the world every year. But unconfirmed reports indicate that nearly 600,000 bottles of the wine were traded in China last year.

"It is hard to calculate the number of Lafite counterfeits," Negrier says. "It is also impossible to gauge the extent of trading in fake Lafite wines from the numbers. The extra number of traded wines could have come from older stocks of the beverage."

Explaining the problem of fakes, Negrier says that some counterfeit winemakers have also incorporated the word Lafite in their products. Examples of this are the "Lafite Prince" and "Lafite Princess" that are available in China.

Without adequate knowledge of the company and its brands, Chinese buyers can get hoodwinked.

"So it is even more important for us to educate the consumers about Lafite and its wine legacy," Negrier says.

To counter this challenge, the company has set up a team of legal professionals to take action against fake brands in China. The company is routing its products in China through an exclusive distributor, ASC Fine Wines, and has also introduced authentication seals for its wines.

"Our target consumers are all wine lovers and not necessarily high-end consumers or rich people. They can be from varied age groups and social levels. Chateau Lafite is definitely high luxury, but we also have DBR collections priced at 200 to 1,000 yuan," says Negrier, clarifying that DBR collections such as Legende, Saga, Reserve Speciale and Selection Prestige are genuine DBR products. Most of the collections are produced at DBR's special wineries in Chile, Argentina and South France.

"It is not easy for beginners to appreciate Chateau Lafite, as it is hard to make out the subtle difference from other brands. Our endeavor in China is to have a hierarchic product structure, so that consumers can move step by step to the premium brands like Chateau Lafite, " says Negrier.

To cultivate more customers in China, the company is also making a big splash on the social networking scene with Lafeizhilv, its official micro blog in Chinese. Lafeizhilv, or the voyage of Lafite, managed to attract more than 2,450 fans in the first week of its launch.

"Micro blog is a good way to convey the brand's history, information, philosophy and spirit to Chinese consumers. People will also find helpful details to distinguish genuine Lafite wines from the counterfeits," says Jean-Luc Vincent, strategy and development manager of DBR Lafite.

Eyeing the growing market potential for red wine in China, the company opened a vineyard in 2009 at the Penglai peninsula in Shandong province in association with Citic Group, a State-owned investment company.

"We have been in the Chinese market for more than 20 years, and are more than aware of the people's affinity towards wine that is deeply rooted in their culture. There is no doubt that wine culture is well appreciated in China. But more importantly, the terrain, and the opportunity to make good wine without too many complicated techniques, is what spurred us to make the investment in Penglai," Negrier says.

According to Vincent, DBR Lafite had quietly tasted, observed and rated most of the wines produced in different parts of China for more than 10 years, before it signed the investment deal with Citic Group in 2008.

"Like the DBR Chateau d'Aussieres in France, the Penglai Chateau will target entry and mid-end consumers with affordable, mild wines. But we are not sure when the product will come onto the market as we are still studying the soil. It can be five to 10 years. We will never do anything hastily and not bring any products that do not meet our quality standards to the market," Vincent says.