Australia Tackles China's Fine Wine Market

    Already a leading force in the mid-market segment, more Australian winemakers hope to take on the dominant French in China's fine wine market.
    Penfolds only released 12 "Ampoules" last year
    Jing DailyAuthor
      Published   in Fashion

    In Terms Of China Imports, "France Is Out In Front, But Australia Is A Close Second"#

    Already a leading force in the mid-market segment, more Australian winemakers hope to take on the dominant French in China's fine wine market. Unshaken by signs that import growth is slowing, major wine-producing countries continue to focus on emerging Asian wine markets like mainland China, even as domestic Chinese winemakers and joint ventures step up their games and pump out aggressively priced reds of rising quality for the mid-market.

    Though the import market remains hot — growing 7.9 percent to 394.46 million liters in 2012 — and the market itself is expected to grow some 40 percent over the next four years, a recent report by Vinexpo and the research group IWSR held that opportunities for foreign wine brands will be increasingly contentious and limited. For some Australian wineries, however, wine "newbies" -- often less married to big French names than their older, wealthier counterparts -- is cause for optimism. As Darren Rathbone, chief executive of the Rathbone Wine Group, told the drinks business this week, sales of high-end Australian wine are "flying" in China right now, with some names finding success moving up the value chain.

    From the article:

    Speaking to the drinks business in London this week, Rathbone, who presides over Australian fine wine brands such as Yering Station and Mount Langhi said:

    “Australian fine wine is flying in China at the moment. We’re successfully distributing our wines through The Wine Republic in China, which we co-own.

    “In terms of imports into China, France is out in front, but Australia is a close second in both volume and value sales and considerably ahead of Chile.”

    Rathbone admitted that the thirst for Australian wine in Asia is driving some producers to pull out of Europe and turn their priorities eastwards.

    “A lot of Australian wine companies are chasing the Chinese dragon at the moment and are pulling out of Europe because it’s too expensive to be there.

    Among the Australian wines faring best in China at the moment, Rathbone singled out Penfolds Grange, which he said is "seen as the Australian Lafite." Big, bold reds continue to lead the market, Rathbone noted, as are strong brands, since Chinese buyers continue to be motivated more by status and price than regionality. Australian brands have an additional opportunity in the higher end of the market this year owing to the current climate of gift-giving in China. Considering the majority of wine-drinking in China continues to take place at business functions rather than at home, less widely known (yet high-priced) Aussie wine brands could strike that all-important balance between price and prestige.

    These shifting trends in the market could go some way in explaining why Penfolds in particular has made very much overt gestures to the higher-end of the China wine market over the past couple of years. After choosing Shanghai for its first Bin 620 release in nearly half a century in 2011, the winemaker promoted its US$176,000 “ampoule” of 2004 Kalimna Block 42 Cabernet Sauvignon in China as well as key markets like the UK.

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