Hong Kong: Door to China opens for California wines

Hong Kong is poised to help open the vast Chinese market to wines from Central California and other regions of the state, a top Hong Kong trade official says. Donald Tong, Hong Kong's Commissioner for Economic and Trade Affairs, touted the market potential for California's wines during a visit to the state last week. He said California's wine producers can benefit from Hong Kong's emergence as an international wine business center. That status got a major boost when Hong Kong removed the duty on imported wine in 2008. Lifting the duty led to more American wine flowing into the city of 7 million, which is part of mainland China, but enjoys market freedoms as a special administrative region of the People's Republic.

However, cracking the Chinese wine market isn't simple, said Jeff Bitter, vice president for Allied Grape Growers, a California winegrape marketing cooperative based in Fresno.

"We repeatedly get calls from people interested in bringing wine into China, and nine out of 10 deals don't materialize," said Bitter.

He's not sure what's causing the problem.

"I'm not saying it's impossible to grow that market, but it's a lot different looking for the outside in than when you're at the ground level," Bitter said.

Meanwhile, American wine exports to Hong Kong were valued at $9 million in 2007, but grew to $42 million in 2009 after the wine duty was lifted. Tong said he believes "a lion's share" of that American wine came from California since it's the nation's leading wine producing state.

Despite that growth, the United States trailed France, Great Britain and Australia in sending wine to Hong Kong in 2009.

"There is room for improvement," Tong said of the American market share, and he added that California can help increase it: "The California business community knows the Hong Kong market. They just need to be aware of the removal of the duty. Some producers don't know about that."

Another benefit for Americans is that wine going through Hong Kong to the People's Republic faces shorter custom delays than at other ports, Tong said: "This arrangement is very much welcomed by wine producers. We are hopeful we can provide them with information and contact points so later on they can explore this market potential."

Tong promoted Hong Kong during a speech to the California Chamber of Commerce, and he also visited with state lawmakers.