Wine from the Gobi desert aims at booming market

WUHAI, China (Reuters) - As spring warms the sands of the Gobi desert in China’s vast Inner Mongolia region, it’s not just the local camels who are happy to see the end of a long, cold winter.

Just a few hundred metres from towering sand dunes, workers unearth row upon row of grapevines buried under the sand to protect them from temperatures as low as -20 degrees Celsius (-4 Fahrenheit).

These vines are helping fuel a booming Chinese wine industry that has grown by leaps and bounds in recent years, as the world’s most populous nation grows wealthier and embraces foreign tastes.

Chateau Hansen, which first planted vineyards beside the Gobi in the early 1980s, says the hot, dry summer and plentiful water from the nearby Yellow River make the location among China’s best for wine production.

This moderate-sized vineyard near Wuhai city, 670 kilometres (416 miles) west of Beijing, now boasts 250 hectares of Merlot, Cabernet Sauvignon and Cabernet Gernischt grapevines.

“The lowest temperature gets down to below -20 degrees C, but in summer, it can reach 38 or 40 degrees C (102 or 104 F),” said Li Aixin, Chateau Hansen’s head of viticulture.

“Here the four seasons are good for the growth of the grapes, but in the winter we need to bury them in the earth” to keep them from freezing.

To raise its profile, Hansen has built a grand European-style chateau, which includes a hotel, and enlisted the help of a French wine expert who acts as winemaker.

In a lavish commercial made for regional television, wine consultant Bruno Paumard tastes blends in the chateau’s cellar, which holds more than 1,000 barrels.

Paumard, who worked as a winemaker for years in France’s Loire Valley before moving to China, says Hansen sells most of its wine to government organisations and regional enterprises, a far cry from established markets such as France, where most wine is bought for home consumption.

“Eighty percent of the market in China is really the local governments who encourage the enterprises in their cities to consume red wine, of a certain brand, at their banquets in the place of Chinese ‘baijiu’ for their incessant and never-ending toasts,” said Paumard, referring to China’s home-grown fiery rice wine. “So it’s actually a market that’s totally unique.”

Banqueting is a big part of Chinese official and business culture, and rather than being sipped, wine is often raised with a toast of “Ganbei!” - literally “empty your glass” - and knocked back in one gulp before the glass is refilled, much like the drinking ritual for baijiu.

According to Hansen, a sudden preference for wine over baijiu at official banquets saw the company’s revenue almost double from 2010 to more than 100 million yuan in 2011. The winery expects sales to double again in 2012.

Hansen Chief Executive Han Jianping, who made his fortune in real estate development, now plans to invest 3 billion yuan to build a wine cultural centre - a vast complex with a host of European-style buildings - near Ordos, Inner Mongolia’s biggest coal boomtown, 270 km (168 miles) east.

Han said he is confident that growth in the industry means that such an ambitious project carries little risk.

“I think first of all the momentum of growth in the wine industry is huge,” he said. “With a great foundation of more than 1 billion people as we have in China, and (the industry) growing at 20 or 30 percent a year, there is a huge potential for more growth.”

China has become the world’s fifth-largest consumer of wine, ahead of Britain, according to an International Wine and Spirit Research study, which forecasts 54 percent growth from 2011 to 2015 - the equivalent of a billion more bottles.

Chateau Hansen regularly receives tour groups from local governments or businesses keen to learn more about wine production and culture.

Almost all of Hansen’s wine is sold within China, but the company hopes VinExpo Asia Pacific 2012, a global wine and spirits trade fair that takes place in Hong Kong this week, will help propel the brand onto the international scene.

“I am really interested in red wine, because I feel above all that it is a very tasteful drink,” said Wang Na, a local English teacher.

“Drinking red wine can show your own good taste. So when people from different countries drink red wine, we think it’s a symbol of being cultured,” said Wang, who added that she also believes red wine is good for women’s skin.

Reporting by Maxim Duncan; editing by Terril Yue Jones and Elaine Lies