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New wine in old bottle: Chinese wine scam

New wine in old bottle: Chinese wine scam
By Rakesh Neelakandan

The market of Chinese wines is huge as the country is in a growth spirit where drinking wine is a testimony to a position up there in the upper pedestal.

Given below is the descending order at which wine lovers in China rate their preference:

First in line comes the Chinese red wine; which is preferred by most Chinese, thanks to their love for tea which has strong tannins. This is followed by French wine, Bordeaux, and finally, Chateau like labels.

(In 2010, a case of Chateau Lafite 2009 was sold for 43,000 pounds in Hong Kong; a figure three times bigger than that of an identical London-sold bottle.)

According to the statistics from International Wine and Spirit Research, in 2009, the market for Chinese wines had been to the size of 93 million nine litre cases which was expected to breach 100 million mark in 2010.

No wonder, market for imported wine is growing in a blitzkrieg pace, to the tune of 46% Compound Annual Growth Rate in the last ten years and 72% in the past five years, according to Beveragedaily.com. And this market forms a 10% fraction total wine market in China.

Reports suggest that China may even overtake Australia in wine production in a period of three years taking it from tenth to sixth place by 2014. This warrants a rise of 77% in output.

In 2009, Chinese output stood at 72 million cases, which is equal to 960,000 tons, a staggering 28% Y-O-Y growth. If the momentum is maintained, the country’s wine output would reach 128million cases in 2014, seven million cases high on Australia’s projected output for the same year.

Some of the world’s most famous vineries want to exploit this opportunity: Torres, typical Spanish winery is already having stakes in two vineyards in China. And, Shangdong region is evolving as a hot spot in China’s wine map.

But high-cost vintage wines are also riding a wave of scams as new wine is filled in old vintage bottles and sold for hefty sums to relatively uneducated (in wine), over-night millionaires.

An empty wine bottle is sold for 300 pounds in China with Lafite and Maotai wine bottles clocking huge demand. 2,900 yuan (£282) for an empty bottle of Lafite Rothschild is not a bad bet after all!

To counter this, ‘originals’ are doing everything in their command with holograms and seals and what not!

In fact, it has opened up new business vistas for security firms in packaging and brand protection:

BrandWatch Technologies, a Portland-based concern and France-based, Prooftag, recently informed of a partnership intended to come up with a set of advanced protection tools for the wine and spirits industry based out of Western countries.

They offer overt security measures like microtext, packaging design features; covert defence measures like holograms, copy prevention, OVDs, intaglio inkcoding, and encrypted bar codes and even forensic technologies like DNA applications.

However, industry players still maintain that fakes can sometimes fool people and make them empty their wallets.

Source: http://www.commodityonline.com/news/New-wine-in-old-bottle-Chinese-wine-scam-36518-3-1.html