Issue link: http://winesandvines.uberflip.com/i/101495
SALES & MARKETING made from grapes. ���They wanted to know about the wines and they wanted to taste them, but they are still learning,��� he says. ���Hong Kong is very fast paced: very go-go-go. They weren���t as passionate about wines. They were about getting it there and getting it sold.��� In fact, Wlodarczyk tells Wines & Vines, during the trip he met a representative whom he hopes will be facilitating his wine sales in Hong Kong, mainland China and Taiwan. ���They have an office here in the U.S. and an office in Hong Kong,��� Wlodarczyk says, adding that he feels more comfortable having a person on the ground to manage Goose Ridge���s business in Asia. a border with the New Territories of Hong Kong.) It���s sort of a mystery but not hidden; it���s happening in plain sight,��� he says of the transfer. According to the ATO, 14% of U.S. wine shipped to Hong Kong (by volume) is then re-exported elsewhere, and re-export figures are even higher for European, South American and Australian wines. Of the wine re-exported from Hong Kong, 82% by volume goes to mainland China, 12% is shipped to Macau (another Chinese special administrative region, this one known for its tourism and large casinos), 4% is sent to Vietnam and 1% is shipped to Taiwan. Although mainland China receives the vast majority of re-exports by volume, Macau is the final Wine buyers and distributors line up to sample bottles from California at the Hong Kong International Wine & Spirits Fair in November. No one-size-fits-all Erich R. Kuss, director of the ATO in Hong Kong, is quick to point out the differences among China���s regions. ���Hong Kong and mainland are two completely different markets,��� Kuss says. ���Hong Kong is not only more open but more accustomed to western ways. There are less cultural misunderstandings.��� In 2008 Hong Kong announced it would eliminate all duty on wine imports. Consequently, some companies ship wine to Hong Kong with the intention of transporting it elsewhere. Kuss says that when his office sees a spike in the amount of wine coming into Hong Kong, it���s safe to assume that many of those bottles will end up in mainland China, where import duty on wine is 14% plus 17% VAT (value-added tax) plus consumption tax. ���There is a lot of wine that is handcarried up the border or put in a truck and driven up through Shenzhen (which shares again, U.S. wines are not well represented in this category. ���It tends to be four shelves of French, two of Aussie and five (single) U.S. wines.��� Realistically it is difficult for American wines to compete with French, Italian and Spanish wines in the hypermarket category, according to Michael Parr, the export manager for Wente Vineyards who spoke at The Seminar Group���s recent event Exporting Wine to China. ���Do you have the right products for their type of distribution? Probably not. They���re coming over for $1-$2 per bottle.��� For smaller boutique wineries looking to export, lucrative options include fine dining restaurants and hotels. ���We have a Consumers and members of the trade in Asia are eager to learn about imported wines, which made their debut in China at pharmacies. destination for 30% of re-exported wine by value, according to ATO figures. The 11.3-square-mile territory draws 28 million tourists per year, brings in $33.6 billion in gaming revenues and boasts a per capita GDP of more than $65,000���almost double the figure in nearby Hong Kong. The best candidates If the question of where to ship is a complicated one, the idea of which North American wineries are best suited to doing business in Asia is even more nuanced. ATO director Kuss says ultimately it���s a volume game. ���The person who succeeds is not the person with the best wine,��� he says matter of factly. ���There are multiple markets (in Hong Kong.) There are two main supermarket chains that control over 80% of retail grocery sales,��� Kuss explains, adding that these stores like to work directly with suppliers and deal in bulk table wines that sell for $6.45-$9 per bottle. And once lot of unique smaller specialty wine shops,��� Kuss adds of Hong Kong, which boasts the highest per capita wine consumption rate in Asia at 4-5 liters per year. The red wine myth For years Asian wine importers have told their North American trade partners that Chinese consumers are only interested in red wine, prized for its color, which symbolizes happiness and good luck. But the insistence on red wine might have been a self-fulfilling prophecy that���s on the verge of change. Wlodarczyk of Goose Ridge in Washington state says that prior to traveling to Hong Kong he was told that Chinese consumers only drink red wine. Nonetheless, he brought some white wines to pour. ���I asked if they���d like to try the whites and they absolutely loved them,��� he says of the label���s Chardonnays and Rieslings. ���They���ve always been pushed (Continued on page 131.) Win es & Vin es JA N UA RY 20 13 129