Thanks Juan for your perspective. Most interesting.
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“Bordeaux 500” is arguably a poorly chosen name by Liv-ex for that index. It’s not 500 different Bordeaux properties. It’s 50 properties over 10 vintages.
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There is an excellent multi-part post on this topic here: Chinese Whispers and Australian Wine
Delves also into some Australia-specific points and local industry issues, but very interesting reading.
It was always simply rooted in xenophobia. Sinister outsiders are an easy scapegoat for any problem. See also: people complaining about foreigners buying up all the real estate.
Now of course we see that Chinese demand is declining but prices are still going up. Which boogeyman will we decide to blame next?
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thanks for the info!
LVMH or AXA or whoever certainly pay very close attention to their cost of capital, and very few wineries in their portfolio will be sufficiently prestigious to be exempt from that consideration
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sensitive to cost of capital, but also, deep enough pockets to cellar the wine and sit out any price depression too
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seriously? When all the auction houses open offices in Asia and have auctions in Asia, and wine stores report large sales being shipped to Asia, you think the price increase blame on Asia is xenophobic? No question that previous bumps in Bordeaux prices and then in Burgundy were due to increased interest from Asia. Small perturbations in demand cause huge inflections in price since supply is fixed, especially in Burgundy.
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I agree that seems a reach. It was a story that coincided with a general narrative surrounding the idea of China as emerging economic superpower. I don’t think people were setting up the Chinese people as villains for taking an interest in fine wine, just taking note. Sure, there was some “and they’re mixing it with Coke” kind of undertones which were more negative, but I don’t think that the overall driver of that narrative was any kind of xenophobia.
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Only saw that happen once… it was in Reno. So I blame Nevada.
The issue is assigning all of the blame to a single entity. Just like blaming rising housing prices on foreigners buying investment properties rather than domestic investors doing the same.
If small perturbations in demand cause huge inflections in price, it’s rather strange that this only seems to work in one direction when it comes to demand from China…
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I think many have opined that Bordeaux price drops were due to Asia turning attention elsewhere—Burgundy, I believe. It works two ways.
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Belt tightening? I imagine it costs quite a bit of money to build “islands” in the South China Sea. 
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I do a good bit of business in China although not wine related. I recently had dinner with a wine friend from there and he said fine wine prices are down like 80% and that many people purchased speculative producers on the come up as more of an investment than anything.
That was a real thing. With the wealth explosion, ostentatious display was a hyper-competitive game amongst the nouveau riche, with rules. Weird rules. So, of course their were people who truly appreciated great wine. But, when it was a new thing most people weren’t used to. Well, really, if the image of drinking wine at restaurants was a social necessity here and if there was no taboo about adding anything to the glass, wouldn’t we see the same thing? Here. We’d see people adding ice, soda, juice all the time. The practice was a curiosity.
The hope was true wine appreciation would grow enough to sustain the market as the faddiness faded. (Key being enough, as obviously a sizeable growth in the number of true wine geeks was natural.) If you don’t really like wine, the practice would get tiresome to some point of critical mass. An alternative prestige beverage could come along.
Of course the China market helped drive up prices. That market has now plummeted, as others continued to grow. So? That doesn’t negate history. Total world demand and perceived value are what determine market price.
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We used to receive a lot of customers from China pre pandemic and pre economic sanctions.
These customers used to buy a lot of Penfolds wines, but in the main they were not large drinkers, generally it was one bottle per table, whether the table was 8 pax or 20 pax. They were often larger parties as they tended to travel in groups.
The worst thing that you could do would be to take the bottle away after decanting as it was an important part of the social media.
It was clear that the consumption of red wine was seen as an aspirational exercise.
There were a number of customers from Chinese mainland who really knew their wines and gravitated towards high end Burgundy. However they drank moderately and often bought wine to take away, whether to drink or flip at a later date.
I wasn’t really doubting that it happened, just pointing out that feature in particular might have been considered, if not exactly xenophobic, at least negative or patronizing or something. I just don’t think the overall observation of increased sales and interest in fine wine in China was in any way driven by xenophobia, which was point. I think it’s easy these days to attribute such motivations to basically anything and many heads will nod even if it isn’t really the case.
This makes no sense. If a market force has one country’s buying habits as a significant factor, and people point it out, that must be xenophobia? That is a bizarre conclusion. I never encountered the “sinister” mindset at all.
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