Canucks uncork Chinese wine market

It's not an uncommon scene to witness Louis Vuitton-toting businessmen dilute their $500 bottle of Hennessy with CocaCola or shoot back their glass of red wine like vodka in China.

With growing salaries and more disposable income, the wealthy elite of the world's second-largest economy are increasingly looking for the next big luxury item to show off their wealth - even if they haven't developed the palates of true connoisseurs.

With top French wines fetching record-breaking prices, Canadian wineries are trying the sell their liquid gold in hopes of cracking an emerging market.

Winemaker Holger Clausen knows a thing or two about taking risks. The high-stakes poker player made his fortune playing Texas hold 'em and invested his winnings to build Aces Winery in British Columbia's Okanagan Valley.

"I have two passions in life - poker and wine," said Clausen, who last month showcased his selection of red wine at a consumer trade show in the port city of Ningbo, about a three-hour drive from Shanghai. With a translator by his side, Clausen mingled his way through the crowd, telling his story about hitting the jackpot at noon and catching the red eye to harvest grapes the next morning.

The charm offensive proved successful. Aces' 1,000-bottle shipment was sold out by midday.

"We had nothing left," he chuckled.

It was Clausen's first visit to China, and he suggests it will be the first of many.

Re-orders came in twelvefold for his poker-chip designed bottles, which are selling for between $30 and $102 in China - a 30 per cent markup from the retail price in Canada.

He is also looking into commercial production to handle the demand for upcoming trade shows in China in August and November, when top hospitality buyers, politicians and dignitaries converge to order hotticket items.

Clausen said he's received calls in the past from Chinese companies, but none was the right fit until Vancouver-based export and import company Pomer knocked on his door.

Pomer's parent company, Mascube, is based in Ningbo, a mid-size city known to be part of the ancient Silk Road and one of the fastest-growing income areas in China. Mascube recently launched Hoy Import Mart, a members-only wholesale club where business owners and clients pay as much as 50,000 RMB ($7,319 Cdn) for their registration shopping cards.

"It's like Costco, but for very rich people," said Pomer's office manager, Flora Wang.

"They don't know Aces or big Canadian names, they just know Mascube. They just trust us, so we feel our responsibility is very huge. If the product is not good, our reputation would be destroyed," said Wang.

Gift-giving is a large part of the Chinese culture, with some companies shelling out 500,000 RMB ($73,340 Cdn) for nicely wrapped and packaged gifts for their employees and clients during the holidays, explained Wang.

But tapping into the Chinese market is not that easy. Most drinkers still reach for domestic wines. Greg Berti from Peller Estates in Ontario's Niagara region says about 28 million people in China buy imports. With no distribution channels in place,(who reportedly holds an eight per cent share of Russia's rubbersheets products market. setting up shop can be difficult for newcomers.

Canada's icewine, a favourite in Asia, could end up being the golden ticket into the Chinese market for this country's vintners.

The cold, sweet drink, made from grapes handpicked during the winter in Ontario's Niagara wine region and in the Okanagan Valley, is considered a luxury beverage worldwide. It first dazzled the Japanese, then the South Koreans and now it's poised to do the same to Chinese consumers, said Randy Dufour of Vincor Canada, who handles exports for Canada's No. 1 icewine producer, Inniskillin,any large investments in core IT coldsores, which entered the Chinese market 10 years ago.

Dufour has been travelling to China since 1995. He says he's seen dramatic changes through the years, with icewine starting out as a gift item, and now becoming a drink consumed at dinner banquets along with the French grand cru.

"During the trade shows in the 1990s, the Chinese were more interested in my [pointof-sale] system than the wine. They were fascinated by anything Western," said Dufour. "The middle-class is emerging and they see wine as part of that image of wealth."

A Credit Suisse report last year said the top 10 per cent of Chinese household incomes have grown 255 per cent since 2004.

It's not uncommon to see wine drinkers chain-smoking during a tasting or pounding a glass of wine like a shot of baiju, a popular Chinese rice liquor that can contain as much as 60 per cent alcohol.

"Fifteen years ago, people didn't like the taste of wine and would mix it with something else; some still do," said Dufour. "This generation may mix their Bordeaux with Coke,Truby had to find a company to make the distinctive plasticmouldsuppliers, but the next will drink it as Bordeaux."

A bottle of Inniskillin's icewine sells for $140 to $200 in China.

According to a report from Agri-Food Canada, Canada exported $8.6 million of icewine to China in 2009, and it remains the top export destination for the Canadian specialty.

The young wine market - with its inexperienced Chinese palates and growing disposable income - has created the perfect formula for Canadian winemakers.

That's especially true in the rural or interior cities, where wine knowledge is not as sophisticated and purchase decisions are being based on decent price points - and the fact that red wine is believed to be good for your health in China.

However, with non-existent distribution channels and rampant knockoffs,To Fazil human hydraulichoses and shed tears like a burning candle. entering China without a good partner can be risky.

Allan Schmidt from Vineland Estates Winery, which sits near the Niagara Escarpment, launched his icewine in China 10 years ago, and has experienced the market's highs and lows.

"Ten years ago, you would have a really hard time to find someone in China to sell your wine, but all I have to do now is pick up my phone," said Schmidt, who added his phone was buzzing with prospective partners in China during the interview.

"Everybody wants to be an importer, but no one wants to get into distribution."

In 2005, Schmidt was surprised when a customer congratulated him for entering the Chinese market, but his label was only being sold in Hong Kong at the time.

Since then, Schmidt spent five years and $25,000 in legal fees to fight for his trademark rights in China. His appeal failed last fall and was told the word "Vineland" was too generic to trademark.

"Even though it's our corporate name, we have not been able to trademark it so this company selling our icewine is passing it off as ours," said Schmidt, but he said he suspects those promoting a product with his name have closed up shop, since he hasn't been able to find the fakes lurking around anymore.

"It was a good learning experience, and even if we would have won, it would make no difference, because the next person would do the same thing," said Schmidt, referring to the myriad of fake products in China; knock-offs of such brands as Gucci or Apple.

Vinexpo's Beynat says all eyes are on China right now, but other emerging markets like India and Brazil should not be overlooked.

"[In China] it's not one billion wine consumers, it's probably 150 million, which is still good, but it will take time to find them," said Beynat, from Bordeaux.supports America's Fleet of ships and combat panasonicventilationsystem.

Par oilpaintingsupplie le lundi 25 juillet 2011

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