For more than a decade, Napa Valley vintners have been exporting wine to China; and now, one of the most recognizable wine regions in the world will be the first acknowledged with Geographic Indication (GI) status in China. Geographical indications are used in all countries to act as a certification of authenticity. This is the first time that China has granted a GI recognition to any wine region outside of its own borders.
“Being first speaks volumes to what people think about Napa Valley,” said Terry Hall of the Napa Valley Vintners. The Napa Valley Vintners brokered the deal, working with the Chinese government for nearly 14 years. The new GI status step will help prevent Napa Valley knockoffs and counterfeiting of labels and allow for consumer protection in China's rapidly growing market.
"Getting recognition is an important step, because France has a 40-year head start about training the Chinese consumer about what wine is about," said Mike Reynolds, president of Hall Vineyards. "It's time for Napa to educate them on the style of our wines.” French regions like Bordeaux and Burgundy have enjoyed strong sales among wealthy Chinese wine consumers, but no French region has obtained GI status yet. Bordeaux wine industry members have been working for several years now to develop an agreement with Chinese government officials.
France may hold a larger share of the Chinese market, but interest in Napa wines is growing. Events featuring Napa wines are regularly selling out, and beverage directors and sommeliers are getting behind the wines, generating a strong interest. According to Hall, sales of Napa wines in China grew 34 percent from 2010 to 2011. Wine exports to China have increased for eight consecutive years, growing more than 2,200 percent from $3 million in 2003 to $69 million last year. Anthony Davie, managing director for Treasury Wine Estates in Asia, believes the GI designation should raise the profile of Napa Valley, generating more trade.
The next obstacle will be working with Chinese authorities to enforce the GI status. All wine needs to be registered before going to the market; with the GI status in place, a red flag will go up if a counterfeit wine doesn't match up.
Last year, 56 million cases of wine were purchased by Chinese consumers, making the country the world's fifth-largest wine market. “The world of wine consumption is becoming more sophisticated,” added Hall. “What we've found in China is because they are recognizing the quality, there is a lot of energy and excitement surrounding the wines. All the right pieces are in play for the market to grow.”