Wine producers make a beeline for Chinese market

Price is major obstacle KEVIN MAYHEW THE WORLD’S premier wine producing countries have been falling over themselves to gain a foothold in the market of the rapidly expanding Chinese affluent – a focus that gained momentum after World Trade Organisation (WTO) entry and subsequent import tariff reductions. However, now aware of the importance of the local market on a global scale, Chinese wine producers have taken up the challenge to be competitive and are doing more to harness the local market, according to an Asian brief from Business Monitor International. Since WTO entry the tariff on an imported bottle of wine has fallen from 43% to 14%, while tariffs on bulk wine imports have fallen from 43% to 20%. Major wine producing nations France, Italy, Spain, Australia, South Africa and the United States all entered the market to offset stagnant growth in their more traditional local and international markets. The major problem is that, even with the reduced tariff, imported wines are still expensive, even for the newly wealthy. Good local wines therefore have a great chance of getting a foothold, based on price. “The Chinese wine is not currently up to the standard of the international players, but is significantly more affordable and appeals to the new customers who are as yet unsure of their preference. Gradually these local wineries are learning from their international rivals and developing better planting techniques as well as picking up tips on marketing and distribution strategies,” the report states. International winemakers are taking a positive view saying that local wines are converting consumer preference towards wine and they have centuries of experience to enable them to meet the discerning tastes of the affluent Chinese as they select from a basis of more sophistication in the future.