Wine prices decline in China, Lafite worst hit

Prices of fine wines have seen a steady fall in recent months in China, with Lafite experiencing the steepest decline, Chinese wine dealers said Monday.

"Taking Carruades de Lafite for instance, the price has dropped by 20 percent in the last six months and Chateau Lafite 2008 has even dropped by as much as 45 percent in value, the first price decline in eight years," Li Zhuge, a wine dealer in Beijing, told the Global Times Monday.

A bottle of Carruades de Lafite was sold for around 5,000 yuan (US$791.69) in China at the beginning of last year, but the price is between 3,000 yuan and 4,000 yuan. Chateau Lafite 2008 sold for up to 11,500 yuan per bottle last year, but is now selling for around 7,000 yuan, according to Li.

In October 2010, the price of Chateau Lafite 2008 shot up by 20 percent in China after it was announced the bottles would have the Chinese character for the number eight, which is considered to be fortuitous in China, according to the London International Vintners Exchange.

The vintage, which is seen as a barometer for Lafite prices, even reached a peak of more than 60,000 yuan per bottle in China in March 2011, Beijing Morning Post newspaper reported last October.

"China is not a mature market for wine. What the consumers care about most is the label on the bottle, not the taste of the wine," Lu Fei, manager of a wine salon in Beijing, told the Global Times Monday.

"Chinese consumers have been in a frenzy to buy Lafite to offer it as a gift, which has shored up its prices," Lu said.

Due to the high profit, illegal winemakers produce numerous fake bottles, targeting inexperienced consumers.

"Almost 90 percent of the Lafite sold in China is fake. The prevalence of counterfeits has gradually driven consumers away from the brand and eroded its value," consultant Sommelier Duan Lian told the Global Times Monday.

WineSociete China, China's leading organization for wine education, attributed the price drop to the slowdown in the global economy and China's tightened monetary policy.

Due to the tightening of money supply and credit in China, many Chinese collectors have been selling fine wines in order to generate liquidity, the organization said.

Wang Dehui, a wine marketing specialist at China Wine Union, said the price decline signaled a noticeable change in consumption attitude in China and marked the beginning of more rational consumption.

"The market hype has boosted the prices of Lafite over the last few years, but consumers are now more rational in choosing wine brands," Wang said.