Michael Bleby Reporter

Michael writes on emerging markets, architecture and engineering. He has served as a correspondent in Tokyo, London and Johannesburg and has written for Reuters, the Financial Times, The Age and The Sydney Morning Herald.

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The best way to promote wine in China

Published 03 December 2012 06:18, Updated 04 December 2012 05:28

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The best way to promote wine in China

Australian wine has been marching up the value chain in China’s growing market and in August this year, according to Wine Australia figures, Australian wine overtook French in terms of the average per-litre value of bottled wines imported into China. Photo: Michele Mossop

Xiong Qiang says his favourite Australian wine is Penfolds. Which one? I prodded, during a phone interview last week.

“Bin 707, 1992,” he replied.

For Xiong, the chairman and chief executive of TTG Mobile Coupon Services, the $260-per-bottle price tag of the top-range Cabernet Sauvignon became a whole lot more affordable last week – on paper, at least – when the shares of his ASX-listed company shot up 50 per cent on debut.

Penfolds – and no doubt the whole wine industry – will be hoping e-commerce entrepreneur Xiong follows through on his stated intention to take Australian wine take back to friends after his week-long visit. But even if he doesn’t, others like him seem to be doing just that.

Australian wine has been marching up the value chain in China’s growing market and in August this year, according to Wine Australia figures, Australian wine overtook French in terms of the average per-litre value of bottled wines imported into China. The average Australian price per litre is just over $US6, while the French average is closer to $US5.50. In addition, Australia is the biggest source of Chinese imports of bottled wine averaging over $7.50 per litre.

The marketing work done by companies and industry groups such as Wine Australia is a crucial part of this rising position of Australian wine in China and Hong Kong. In addition, those messages will be reinforced by the greater integration of Chinese business and human links in Australia. But it’s not just business leaders such as Xiong Qiang who will spread the word. All types of visitors will.

“Australia is a major destination for Chinese university students as well as emigration,” says Nick Miller, the Beijing-based China manager for wine importer and branding company Winery Exchange. “As these groups return to the mainland, they bring with them their experience of drinking Australian wine. Being that many of these people are socially well connected, either students online or businessmen through their networks, this helps to act as a natural word of mouth marketing tool for Australian wines.”

Still, maintaining that strong position takes a lot of effort and the industry shouldn’t take anything for granted. Interest in wines outside France may be growing, but Australia is not the only beneficiary.

“There is a growing interest in premium wines from a number of regions outside of France,” says Crystal Edgar, trading company Kerry Wines’ brand manager for Greater China.

In fact, Australia only overtook France because the average value of French imports to China fell, rather than because of any great growth spurt on the part of Australian prices. These have, in fact, been pretty steady at the $6-mark for the past 12 months. Meanwhile, over the same time, the value of US bottled imports has marched up from $4 to over $5, figures from Wine Australia also show.

The local industry should hope Xiong keeps coming back. Given his new ASX listing, he’s very likely to. And - you never know - it may not just be bottles of wine he snaps up.

“There’s another winery I know, called Two Old Men,” Xiong says through his interpreter. “I’d like to buy it.”

Fred O’Keefe, who owns Shepperton, Victoria-based export label Two Old Men with mate Brian Button, says he hasn’t had any takeover approach yet. But he’s always ready to answer the phone.

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