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Chinese good fortune comes calling for small West Australian winery Singlefile

www.afr.com by Michael Smith12/10/2018  

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Tony Wang is a "master brand builder" with a tight grip over distribution, which is important in China where fake brands are common. Grainne Quinlan

Ningbo, China | Phil and Viv Snowden struck gold when Chinese businessman Tony Wang walked through the cellar door of their family-run winery in Western Australia.

The retired couple were preparing to shut up shop on a Sunday afternoon in January 2016 and enjoy a glass in the vineyard on their property at Denmark, in the Great Southern region 400 kilometres south of Perth.

"It was serendipity," Mr Snowden says of the chance meeting that has allowed Singlefile Wines to crack the booming China market. "We are in the very early stage of building a brand in this vast nation."

Mr Wang, an electronics entrepreneur with a passion for art, astronomy, Porsches and polo teams, was in the remote, cool-climate corner of Australia searching for a premium wine to stock in his galleries in China. He liked Singlefile's premium product and the fact that the Snowdens refused to give discounts, something other Chinese visitors to the winery during the state's mining boom had asked for.

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Tony Wang liked Singlefile's premium product and the fact that Phil and Viv Snowden refused to give discounts.Grainne Quinlan

Fast-forward several years and the Snowdens are in China for the first time to see their award-winning wines on display in a showroom fancier than anything they would have dreamed of in Australia. Mr Wang, glass of red in hand, welcomes the couple to the space dedicated to the Singlefile brand in his native Ningbo, an affluent coastal city south of Shanghai.

"I want authentic Australian wine. Not this American wine," Mr Wang says, having a dig at Treasury Wine Estates's decision to produce its premium Penfolds brand in California. (The AustralianFinancial Review does later spot several bottles of Grange in his private wine cellar downstairs.)

Singlefile, which produces 15,000 cases of wine a year, currently sells 3000 cases to China. Mr Wang, who has helped them establish 12 agents in 12 cities across China, plans to sell the premium wine brand in up to 100 cities throughout the country. The Snowdens say growth will be capped so the product is not compromised.

Serendipity strikes

"This was never our plan," says Mr Snowden, as he inspects the illuminated display cabinets featuring the award-winning Vivienne Chardonnay named after his wife.

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The Chinese showroom shows an emphasis on packaging, display and the winery's many awards rather than tasting. Grainne Quinlan

"Our plan was to spend 10 to 15 years building a brand in Sydney, Melbourne and a little in Perth. We felt to try and jump out into the overseas markets before you have a local brand would probably be suicidal in the long term but it's worked well."

It was the kind of break other wineries, which spend years knocking on doors in China without success, can only dream of. But finding the right China partner was not just luck.

The Snowdens credit their son-in-law Patrick Corbett, who runs Singlefile, for its success building a premium brand and having the patience to spend years building a relationship with Mr Wang, who believes in knowing someone for "1000 days" before sealing a deal. It is a story of the importance of the personal relationships many Chinese businesspeople have with their foreign partners, which includes getting to know each other's family, visiting homes and overcoming cultural barriers.

Mr Wang made his fortune starting the Ningbo-based HKE Electronics distribution firm but now has many other distractions, including his passion for wine, art, photography and star gazing from the private observatory on the roof of his office tower.

He does not want to talk too much about himself but gives the Financial Review a tour of his private gallery, including a glass platform hanging 10 storeys high where he goes to "sit and think". The building also includes his private offices crammed with memorabilia, private gym, DJ station, and golf putting green. He has returned to Denmark in WA five times since his initial visit and designed a wine label featuring images from the Snowden's property.

"He has been influential in guiding us on matters of importance in China," Mrs Snowden says. "Things like labelling, bottling, colour schemes, layout. He has told us from time to time that our packaging is not good enough." The couple also say Mr Wang is a "master brand builder" with a tight grip over distribution, which is important in China where fake brands are common.

The difference between marketing premium wine in China and Australia is evident in the showroom where there is an emphasis on packaging, display and the winery's many awards rather than on tasting.

The Snowdens, who ran a mining consultancy in Perth for 20 years, set up Singlefile seven years ago.

"The mistake we see other producers make is they want to move really fast. I'm not sure that is a recipe for great success. As soon as you want to move fast I suspect there is a great demand for discounting and people want special deals if they are going to take large volumes. It certainly wouldn't work for us," Mr Snowden says.

"Tony has been clear he is not in a rush and we don't have the production to be in a rush. We are an absolute minnow but we are working together, pacing ourselves and maintaining brand control."

Australia's annual wine exports to China soared through the $1 billion mark for the first time earlier this year after rising by 51 per cent for the year to March 31. Treasury Wines was a major driver of the export success to China but is now facing over-supply issues with some brands.