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B.C. wine exports to China holding their own

theglobeandmail.com by DAINA LAWRENCE24/06/2019  

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Jesse Harnden, General Manager of Mt. Boucherie Estate Winery and Rust Wine Co., at the 'Canadian Master Class' held this March in Chengdu, China.

Exporting wine to China was always part of the business plan at Mt. Boucherie Estate Winery, a 200-acre winery in West Kelowna, part of British Columbia’s Okanagan Valley.

“From day one, this was what we were going to do,” explains Jesse Harnden, the general manager at Mt. Boucherie, where 15 per cent of the winery’s annual business comes from Chinese exports.

The owner, Sonny Huang, was the former wine exporter to China for another large Okanagan winery for years, which is where he met Mr. Harnden about a decade ago.

Prior to his wine enterprises, Mr. Huang made a living as an importer/exporter of nuts, madarins and other agrifood products, so the move to wine was a fairly smooth transition.

“The infrastructure, like the shipping, was already all set up,” explains Mr. Harnden, “so adding wine into the mix was a lot more convenient for us than for some other producers in similar situations, wanting to get into the wine-export side of things.”

Like Mt. Boucherie, several B.C. wineries have started exporting their products to China in recent years as Chinese consumers continue to broaden their palates from Canadian ice wines to Canada’s more full-bodied reds.

In 2018, B.C.’s wine exports to China totalled 463,459 litres, up from 291,852 in 2016, but not quite as much as the 624,159 litres seen in 2014, according to Statistics Canada.

But while many wine exporters from B.C. are still seeing an enthusiastic response from China, not all of Canada’s exports are having the same reception. These days, exporting to China can come with its own set of complications as China’s current trade relations with the United States continue to be strained, even hostile, with hefty tariffs being slapped on a broad range of goods.

One way to look at this particular period in our exporting history is to take it as a sign that companies should be diversifying their export markets and seeing what else is available to them, explains Stewart Beck, chief executive officer of the Asia Pacific Foundation of Canada.

“In uncertain times, it doesn’t matter whether it’s your stock market portfolio or your business, you should be thinking about diversification,” Mr. Beck says.

Having relied so heavily on good trade relations with the United States for years, many companies may have failed to look elsewhere for trading partners when there was a big market so close by.

“The good and the bad about NAFTA is that we’ve had access to a huge consumer market for an extended period of time and we never really had to think about diversification,” he explains. “But now is the time we really need to think about it because our traditional market isn’t as friendly to us as it has been.”

“Both of them [U.S. and China] are uncertain in some ways, but there are so many markets in Asia that we can capture,” Mr. Beck adds.

Indeed, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), a trade agreement between Canada and 10 countries – including Australia, Chile, Japan, Malaysia, Mexico, New Zealand, Peru and Singapore – was ratified last December and will give the country access to “495 million consumers and 13.5 per cent of global GDP,” according to Global Affairs Canada.

Then there are the 2018 changes to Canada’s free-trade agreement with South Korea, which reduced tariffs for Canadian exports, and subsequently made that market a more appealing option for the country’s exporters.

Other Asian countries such as Japan and Singapore are potentially promising new export markets for B.C. wineries, according to the B.C. Wine Institute, particularly for Canadian ice wine.

But for B.C. wine, China’s market is still presenting growth opportunities and represents a small but important market for the province’s producers, explains Laura Kittmer, communications director for the British Columbia Wine Institute.

“From a marketing perspective, we are seeing small volume growth of B.C. wine into the China market, but what is interesting is seeing the interest in B.C. table wines and red wines grow within this market, not just ice wine.

For producers like Mt. Boucherie, ice wine is still king as that market has been well established in China for years, but the interest in reds is growing with the help of marketing, Mr. Harnden says.

While logistics are definitely a big consideration for anyone wanting to get into wine exporting, marketing is perhaps just as critical. “We don’t have any pictures of frozen grapes,” Mr. Harnden says. “It’s all Lake Okanagan, and we try and present the image, that many aren’t aware of, that we are actually a warm climate in the summer.”

“Like everything else in our industry, exports included,” Mr. Harnden says, “we’re just getting the word out there.”