Conspicuous consumption taints 'dragon' delicacy

(Ecns.cn) -- Traditional Chinese dumplings made of glutinous rice and bamboo leaves, or zongzi, are always popular during Dragon Boat Festival, yet prices for some brands have become unreasonably high, reports the China Economic Weekly.

Some companies have rolled out "premium" zongzi wrapped in elaborate packaging that can cost thousands of yuan, but are they really worth the money? Or is the industry just taking advantage of an age-old tradition that guarantees demand?

Market worth billions

Rather than make them at home, an increasing number of Chinese are choosing to buy ready-made zongzi, causing the market for traditional rice dumplings to explode in recent years.

Though this year's festival doesn't start until June 23, prices of zongzi have already increased by an average 10 to 15 percent compared to last year. Materials such as the bamboo leaves, glutinous rice and cotton threads used to make them have also gotten more expensive, says Weng Yangyang, secretary-general of the Zongzi Committee of the China Food Industry Association (CFIA).

The China Economic Weekly found that individual packages of zongzi normally cost between 20 to 40 yuan (US$3.1 to US$6.3) a kilogram. The most expensive are made by Wufangzhai, a brand-name manufacturer that charges about 60 yuan (US$9.4) per kilogram.

The peak season for rice dumplings always occurs half a month before Dragon Boat Festival, especially the week before, says Li Xingcun, who works on the public relations team at Daoxiangcun, a time-honored snack shop that manufacturers zongzi.

To meet demand, Daoxiangcun started preparing dumplings in March and launched a line of zongzi gift boxes by May, reveals Chi Xiangdong, the company's vice general manager.

In 2008, the zongzi market was worth 2.88 billion yuan (US$453 million) in China. It increased to 3.46 billion yuan (US$544 million) in 2009 and 3.92 billion yuan (US$616 million) in 2010, according to China Economic Weekly.

Chi predicts that the value of the zongzi market will reach 5 to 6 billion yuan this year.

Luxury dumplings

The practice of gift-giving has been handed down from generation to generation in China and is deeply woven into the culture. When holidays such as Dragon Boat Festival approach, choosing gifts is particularly important – especially for people hoping to impress bosses and officials.

Zongzi manufacturers have been quick to cash in on such a lucrative business opportunity.

In 2011, Yucha Shanfang, a food manufacturing company in Beijing, charged 1,780 yuan (US$280) a box for exquisitely-packaged zongzi made under the supervision of the Forbidden City. The news caused a stir all over the nation.

This year the company has launched another line of high-end gift boxes, now priced at 1,880 yuan each. They include 24 rice dumplings in six flavors, a box of "blessing" snacks, a teapot, a teacup, scented tea in a bamboo box, a bottle of wine and a sachet.

The word "Yucha Shanfang" has existed for thousands of years in China, and means "Imperial Tea and Meal Office." Because of its appealing historic connotation, the company's products have always been desirable.

Among the 19 kinds of zongzi products the company has manufactured this year, six cost more than 1,000 yuan (US$157), yet demand is so high that orders have to be made in advance.

Other companies are also cashing in. In Wuhan, capital of central China's Hubei Province, the local Shangri-La Hotel has introduced its own luxury zongzi gift boxes this year, which cost a hefty 2,880 yuan (US$453) apiece.

The boxes contain only ten rice dumplings, but they are accompanied by bottles of Remy Martin VSOP cognac, Australian red wine and Chinese white wine, as well as Dragon Well Tea and XO sauce, reveals Ms Huang, who works for the hotel sales department.

Unreasonable prices?

The prices of normal zongzi are still reasonable, but luxury dragon dumplings are out of control, claims an industry watcher.

A decline in yields of the ingredients needed to make them might be a reason for it, but that does not justify such shocking prices, he adds.

When someone intends to buy luxury zongzi in bulk, salespeople always offer discounts, which reveals the kinds of windfall profits some zongzi manufactures are making, he argues.

The Shangri-la Hotel in Wuhan admits that it can offer a 15-percent discount to anyone who plans to purchase more than 100 boxes of luxury zongzi at a time, according to China Economic Weekly.

Most customers say they won't buy zongzi in fancy boxes because the prices are still far too high, but also because the excessive packaging results in a waste of resources.

Experts say the government should take measures to curb excessive packaging and keep the festival's legacy free from capitalist excess.