American wine exports to China were met with the biggest setback to date when they became the target of the two countries¡¯ escalating trade war, and were hit with increased punitive import tariffs just as the country¡¯s wine exports to China including Hong Kong, Macau and Taiwan saw a 10% increase in 2017.
This inevitably put a dampener on Chinese importers and distributors, prompting some merchants to frantically replenish stocks before the tariffs took effect earlier this year. Others went on a de-stocking streak, wary of not being able to absorb import tariffs that now amount to 39% compared with the normal 14%.
In an effort to inject confidence into the Chinese market, Beros told dbHK this week: ¡°I think wineries that are committed to China are committed to export and will continue to promote themselves in the export markets regardless what trade issues may exist because I think they are looking at [the] long term.¡±
As a trade association representing more than 1,000 California wineries, he said the California Wine Institute will continue to expand and deepen the trade and media¡¯s knowledge of Californian wines with a series of seminars on the mainland in the coming months.
The main goal is to ¡°challenge some of the myths that a lot of people believe¡± about California wines such as California wines don¡¯t age or the generalisation of California being a warm climate wine growing region, he cited as examples.
¡°A lot of people have this misconception that Californian wines don¡¯t age, and they age extremely well. A lot of people know Napa but they don¡¯t realise Napa is only 4% of Californian wines and they don¡¯t realise there are so many sub AVAs ¨C Stag¡¯s Leap, Howell Mountain within Napa,¡± he explained.
Speaking of another common misconception of California being hot and warm, Beros went on, ¡°they think of California they think of warm climate, Cabernet, Zinfandel etc ¡ but there are a lot of cool climate areas such as Sonoma Coast, Carneros, Russia River, Anderson Valley, Santa Lucia, Santa Rita Hills and Santa Barbara.¡±
Meanwhile, with increased tariffs, he believes that premium wines are less price sensitive, which means they are more likely to absorb price hikes.
¡°I think if you are a fine wine lover you are not going to be as concerned about whether a wine costs 600 RMB or 800 RMB if you are willing to spend that price point on the bottle of wine, you won¡¯t care if a wine cost a bit more or less,¡± he continued but noted that he can¡¯t speculate what¡¯s in store over the coming months or individual winery¡¯s strategies in China.
American wine exports to China ¨C 90% of which are from California ¨C were up 14% in value to US$38.4 million for the first six months of 2018, compared with the same period last year, according to figures released by the institute.
(https://www.thedrinksbusiness.com/2018/10/how-american-wines-can-stay-relevant-in-china/)