Entrepreneur Thomas Kaeppelin of "The Cellar" Shares Tricks of the Trade

First, he suggests, the Chinese lack the cultural awareness of wine that informs the lifestyle of European nations. “For the French,” says Kaeppelin, “drinking wine is just like eating a meal, or having a coffee.” In contrast, wine in China is a precious luxury good. “They look at the product like something magical,” he suggests, “just as someone would look at a diamond in another society.” In Kaeppelin’s traditional French upbringing, wine was a way of life. “My father had me start sipping wine at maybe thirteen years old!” he laughs.

According to Kaeppelin, newcomers must approach wine much as a child would. Developing an educated palate requires expert knowledge and experience that many Europeans take for granted. “Say you are a young boy,” he says. “You take a cup of coffee...ugh! You don’t like it! It’s very bitter, it’s black, it’s not good. As you grow up, you like coffee very much. Your palate educates itself.”

An educated palate is still rare in China, a fact most evident in the price tag of quality wines. Wine is competitive with other spirits in France, but not in China. “A big bottle of beer is only five RMB,” says Kaeppelin. “You cannot buy a seventy-five centilitre bottle of wine for 5 RMB!” The cheapest wines, the domestics, are still seven times more expensive than a similar quantity of beer. These, in turn, compare unfavourably to European table wines, which can cost almost 60 RMB per bottle. But that doesn’t mean that wine in China is unpopular. “You have a very active market in the luxury wines,” comments Kaeppelin. “The price is going up, because the Chinese are drinking more and more of the expensive wines while the production of those wines remains the same.”

Still, industry insiders are confident that wine will become a household standard in the future. “While the Chinese are new to the wine market, they are very willing to learn,” says Kappelin. “More and more knowledge from foreign specialists is transmitted to Chinese specialists. Step by step, it diffuses into the rest of the country.” This process has been facilitated by the government officials, who have expressed interest in shifting production away from grain alcohols, which monopolize a valuable staple food.

However, regulation is an unreliable ally for many foreign importers. Expensive permits and stringent customs procedures can make imports problematic, especially for small businesses. According to Kappelin, a foreign currency remittance requires a deposit of more than one hundred thousand US dollars. “As a result,” he says, “you can only go through large import/export corporations, which are mainly located in free-trade zones.”

The resulting logistics can be nightmarish. “Say you have to import to all the major ports in China. You can’t possibly travel all the time to solve simple Customs problems,” he complains. It is impractical for most small importers to cultivate healthy relationships with multiple port authorities. Misunderstandings are common.

Nevertheless, Kaeppelin is optimistic about the future, and looks forward to continued success in the wine industry. His local business, the Cellar wine shop and bar, seems to thrive despite the trade restrictions and cultural misapprehensions. By selling wines for a range of tastes and budgets, rather than just catering to the booming luxury market, his business may be well poised for inclement changes to the beverage trade. Despite setbacks, the future of wine in China looks promising.