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Chinese Corruption Crackdown Bad News For Bordeaux

A while ago, Winedom explored Chinese wine culture including information about crackdowns on corruption within its government. Specifically, the concern centered around officials spending far too much money entertaining. The wine world is feeling the ripple effect from the crackdown.

The Chinese are increasingly interested in wine. From buying up real estate in some of the best areas of France to making wine in their home country, Chinese exposure to the Western World has brought with it a love of wine. In 2013 much attention was given to government officials spending far too much on entertaining, and much of the tab was wine-related. There were huge limits placed on the officials and we are starting to see the results of this.

Between the crackdown and a bad crop of Bordeaux, revenues generated by France on the export of wine to China has dropped dramatically. An eight per cent drop of bottles exported was seen in 2014 with the value dropping around twelve and a half per cent. While other factors may play a role, including the blooming Chinese wine industry and a large amount of Chinese businesses buying their own vineyards in France, the number one and two reasons are the crackdown and bad crop.

China’s population is the largest in the world; France ranks at 20th. Simply observed, the population of China is twenty times that of France, which has benefitted France greatly since China has developed a love of fine wine like those out of Bordeaux. With a drop in luxury wines being purchased by China’s huge amount of government officials supply has dropped considerably. Add that to a bad crop and the Bordeaux region has taken a hit.

While the trend is a downward one, it’s tough to imagine Bordeaux having any trouble rebounding – either by creating wines with a lower price point or finding a new export. Bordeaux is some of the most favored wine in the world. Just ask the Chinese.

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