updated 3/8/2004 1:01:39 PM ET 2004-03-08T18:01:39

When it comes to wine, there's no question about demand in the nation formerly known as Red China.

"It's red, red, red, red. It's gotta be red," according to Michael Parr, export director at Wente Vineyards in Livermore, one of the largest exporters in the U.S. wine business.

But there's also no question who's catering to China's burgeoning demand for wine, and it isn't Northern California winemakers. The United States ranks behind Chile, France and Australia in wine exports to China.

"Most everyone's there to do business, because of its 1.3 billion people," said Parr, who helped set up China's first joint-venture wine importing business in the mid-1990s before joining Wente. "But it's frustrating. It's a niche market, and right now I'm selling more in South Korea than in China."

Mary Ann Sebastiani Cuneo, president and chief executive of Sonoma-based Sebastiani Vineyards & Winery, said high taxes and a preference for bargain-basement brands have cramped Chinese sales of high-end wines from Napa and Sonoma counties, including those from her vineyards.

"They're not willing to pay for the quality of wine we produce," she said. "But if you sell it for $2 a bottle, you do really well."

Even so, there's definitely a long-term opportunity for Bay Area wineries in China, local experts say. China's estimated wine consumption is still minuscule -- the equivalent of one six-ounce glass each year by every fifth of its 1.3 billion inhabitants -- but it grew by 40 percent last year as beer and liquor consumption fell. And both its government and consumers seem eager to broaden their wine horizons.

Gerald Parker, who is organizing the fourth annual World Wine Market exhibition in San Francisco this spring, has been approached by Chinese officials about including a 10-member delegation from China at the event, which links hundreds of small premium wineries with representatives of wider distribution networks.

And Parr argues that wine is starting to become a habit in China's rapidly growing middle class, and that consumers there are gradually becoming more familiar with a spectrum of wine options, including moderately priced wines. However, more than 90 percent of the wine consumed in China is still imbibed in restaurants, he said, and supermarket sales "is still in its infancy."

But the Chinese, who prefer reds because they're seen as healthier and because in Chinese culture the color has always symbolized both health and wealth, are definitely a growing part of the U.S. and California export picture, Parr said.

"China represents a pretty significant market for us," he said, "and we're betting that it'll get better and better."

© 2007 San Francisco Business Times


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