Tsingtao launched its Kai Xuan wine in northeast China's Shandong Province. Priced at around 50 yuan (US$6) per bottle, Kai Xuan targets middle-level shopping centers, restau-rants and entertainment places within the area.

Tsingtao reported that sales of Kai Xuan will meet the company's expectation of 100 tons this year.

"Now is the time when every Chinese wine producer is looking for its right market position. And Tsingtao aims to be one of the best,"said Zhang Jianguo, general manager of Xianghong Trade Co., distributor of Kai Xuan. "High brand awareness of Tsingtao and developed sales network enable us to achieve an increase in market shares within a comparatively short term."

Although more time is needed to evaluate Kai Xuan's future performance, the country's 50 wine brewers are bound to face intense competition in coming years.

Leading domestic liquor producers, including Moutai and Gujing, have started selling wine this year as they face a shrinking market for their traditional products.

Changyu group, the country's largest wine producer, announced recently that it will invest some 100 million yuan (US$12 million) in an advertising and sales promotion of its newly introduced premium brand Cabernet Dry on the national market next year.

"Compared with beer or liquor, wine enjoys huge potential in China, especially when economic conditions are improved and people be-come more aware of quality of life,"said Wu Jianhua, secretary general of Shanghai Brewing Association.

He added wine producers also benefit from favorable government policies.

In recent years, the government has taken various measures, including imposing heavier taxes, to limit the production of liquor in order to save grain while encouraging wine production, which consumes only grapes, said Wu.

Last year, some 250,000 tons of wine worth 5.1 billion yuan were sold on the domestic market, a rise of 19.3 and 16.1 percent respectively from the previous year, according to China Brewery Industry Council.

(eastday.com December 18, 2002)