The Booming in Interwine, China Playing as A Safe Haven

Financial crisis has caused the dull sale of wine, many international wine retailers remarked. However, the sun is still shining though you can't see it in the western hemisphere. During the Interwine China 2008 opened on November 27^th, the prosperous scene indicates that China has become the lucky place for foreign wines.

 

 

The scale of the exhibition is beyond our expectation. The reporter saw foreign wine dealers from more than 20 original countries of wine, including Italy, Spain, France, New Zealand and Australia present in the exhibition and the atmosphere was so hot that financial crisis left almost no effect on it. The disparity in the price of wine exhibited is very wide, with the highest being more than 10 thousand yuan per bottle and the lowest 20 yuan. Australian Wine Exporters, China Branch released an imported wine with original packaging priced at 20 yuan per bottle.

 

Why could the low price be possible? The working staff of Australian Wine Exporters, China Branch explained that besides granting brand popularity with low price, the strong China Yuan remains to be the main reason. “The exchange rate of the yuan rose from 6 to 4 against Australian dollars, which equals to the tariff reduction of 50%. Thus, the importing cost is greatly cut, making promotion possible. ” For sure, the 20-yuan wine is only sold on the big purchase, with 50 dozens as the smallest amount. A Spain wine dealer hold the same opinion that the consuming market in China is relatively stable for now and the strong China Yuan reduces the risk of importing goods to China. All this makes China the haven for foreign wine to assure their profit and sale. 

 

Chinese Wine Market of A Rosy Future

 

Other factors also attribute to the booming of the exhibition. Zhu Yuzeng, a well-know expert on wine marketing said that with excess supply in international wine market, China wine market keeps the highest growth rate, peaking at higher than 15% for 3 years in row. China becomes the competing market. Because imported wine finds no better channel to Chinese market, exhibition acts as the platform for foreign wine dealers to contact with domestic businessmen. Therefore, even though the global economy is declining, Chinese market is welcome warmly by foreign wine dealers. Moreover, it is said that Olympics are the other factor for the booming of exhibitions at the end of the year, since big exhibitions planned around Olympics were all postponed.

 

Abolishing wine duties in Hong Kong at the beginning of this year also expanded mainland wine consumption, one insider remarked. With the special geographical position, Hong Kong makes it more convenient for foreign wines to enter mainland. According to previous statistics, around 20% imported wine in mainland is transferred from Hong Kong. In 2007, the amount of wine (mainly in small packages) transferred from Hong Kong to mainland amounts to 9,986 thousand litters, increasing by 69.5% compared with last year and holding 23.6% of the total imported wine in China. Hong Kong is creating the third largest wine circulating center in the world and this would have a big influence on mainland market. And the statistics this year will also be very encouraging.

 

“Financial crisis is a macroscopic concept which has little effect in food service industry esp. wine industry which belongs to high-and-medium-class consumption.” a wine dealer in the exhibition told the reporter. Wine consumption in mainland China is a fledgling business, a sunrise industry.