Chateau Lafite: a Chinese love story

Chateau Lafite: a Chinese love story
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First Published: Thu, Aug 05 2010. 10 32 PM IST

Sip worthy: In Mainland China, the best Bordeaux is all about status. Zachys / Bloomberg
Sip worthy: In Mainland China, the best Bordeaux is all about status. Zachys / Bloomberg
Updated: Thu, Aug 05 2010. 10 32 PM IST
I am at the Watson’s Wine store in Hong Kong trying to buy my quota of four bottles before my husband and I fly back to India. I struggle with the choices, trying to maximize quality within a reasonable price. In walks a Mainland Chinese man with three women in tow and they head straight to the temperature-controlled section where the really expensive wines are displayed. The salesgirl who has been answering my questions for the last 10 minutes abandons me with a polite “excuse me” and rushes over to serve them. A loud discussion in Mandarin ensues—the man expounding forth, the women nodding approvingly—and a couple of minutes later he emerges with four bottles of Château Lafite. I queue up behind him at the cash counter. His bill is HK$24,000 (around Rs1.44 lakh). Mine is under HK$1,000. We both have four bottles.
Sip worthy: In Mainland China, the best Bordeaux is all about status. Zachys / Bloomberg
I chat with the cashier and she tells me the Mainland Chinese buy just four brands: Château Lafite, Château Latour, Château Mouton Rothschild and Le Pin (Le Pin is arguably the most expensive wine in the world). They also go for Château Petrus, she adds as an afterthought (Petrus prices inhabit the same lofty stratosphere as Le Pin). All these are top tipples from Bordeaux—Lafite, Latour, Mouton Rothschild are renowned first-growths from Pauillac, while Petrus and Le Pin are from Pomerol (Bordeaux wines were classified into five growths a century and a half ago—the system continues to this day—with the first-growths or 1er Cru Classé considered the best, followed by the second-growths, third-growths, etc. Some châteaux, such as Petrus and Le Pin, didn’t participate in the classification, but produce excellent wines that command prices even higher than the first-growths).
With the 2009 Bordeaux En Primeur releases just over in July, and China’s all-time favourite Ch. Lafite releasing at a hefty £1,000 (around Rs72,900) a bottle, it got me wondering about the impact of emerging market consumers on old world fine wines. China’s burgeoning new money has created such a thirst for Lafite and its ilk that the Liv-ex 100—the index that tracks 100 of the most sought- after fine wines—has remained on a heady upward trajectory, up 40% from a year ago. The Chinese impact is clear and dramatic: From 2000 to 2005, the index barely moved from its base value of 100, and that’s when the Chinese fell in love with fine wines, sending the index soaring to its current value of 304.
Will India’s economic boom produce a similar line-up of desi consumers sipping luxury French wines? Will they too have as powerful an impact on the global wine market?
It is instructive to study China’s intense love affair with Lafite. The Chinese have latched on to Ch. Lafite not for its amazing quality, but rather for its amazing capacity to demonstrate wealth. Stories of the Chinese mixing superb wine with soft drinks or juices—to make it more palatable—were common a few years ago. Things have improved since, but an appreciation of the wine for its inherent qualities has little to do with its selection. Robert Parker (the man who stands in for God in the wine world) may go on about “notes of charcoal, incense, black currants, and licorice” or bubble forth about the wine being “expansive, savoury, staggeringly concentrated, and voluptuous” or wonder if the sensational 2009 is a replay of the historic 1959… but the Chinese aren’t really listening. He may give it 98-100 points—the world kowtows to Parker’s ratings—but then he has given an equal score to three other 2009 first-growths (Latour, Margaux, Haut-Brion) but the Chinese chase feverishly after just one: Lafite. The price it commands says it all—a 6-pack of the 2009 Lafite released at £6,990, Latour at £5,900, Margaux at £4,990, and Haut Brion at £3,975. China’s love affair has reclassified the first-growths into a distinct pecking order.
What Louis Vuitton is to bags, or Mercedes is to cars, Lafite has become to fine wines in China—an easily recognizable symbol that speaks money. Place a bottle of it on the table while entertaining important clients and it gives an instant high to your image. You are drinking money, a significant sum in each sip, and that’s what counts.
The curious case of Carruades de Lafite, the second label from the château, demonstrates the stranglehold of the Lafite brand on the Chinese consciousness. Second labels, as the term suggests, are lesser-quality wines made by the same château, often from grapes of younger vines that don’t pass muster for the first label. Second labels are usually priced reasonably. But not Carruades de Lafite—the 2009 En Primeur released at a whopping £1,750 a case, and less than a month later it has climbed to £2,700. Andy Xie in The Puzzle of Carruades de Lafite argues that the meteoric rise of Carruades de Lafite is a result of “mistaken identity” by the Chinese. They see it as the little brother of Ch. Lafite—known as Little Lafite in Chinese—and with prices of the grand wine heading out of reach, they are buying the second label by the droves, pushing its price to a level that no longer bears any relationship to its quality. The Lafite name looks good on the table, and that’s what the Chinese are throwing money at.
So what about India? Will Ch. Lafite hit the jackpot here too? Is there a full-bodied case for other first-growths to flourish? Will Indians concentrate around a handful of status-defining wines (which will they be?) or will other Bordeaux wines have strong enough legs to stand on? Then there is the piquant question of taste—will Indian consumers display better taste than the Chinese?
Complex-nosed questions these, but I am betting that the fine wines of Bordeaux, especially the first-growths, will seduce us Indians as they have the Chinese. The Chinese are guzzling them for status and status alone. Status will be a salient theme for us too—we are not shy in the flash department—but I am hopeful that taste, appreciation and enjoyment will be strong accompanying notes.
Cheers!
Prices mentioned in this article are from the wine merchant Berry Bros & Rudd, and refer to 2009 En Primeur wines released this summer (prices today would be different). En Primeur refers to wines sold while they are still in barrels at the vineyard, likely to stay there for a couple of years before they are bottled.
Radha Chadha is one of Asia’s leading marketing and consumer insight experts. She is the author of the best-selling book The Cult of the Luxury Brand: Inside Asia’s Love Affair with Luxury.
Write to Radha at luxurycult@livemint.com
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First Published: Thu, Aug 05 2010. 10 32 PM IST