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S. Africa wine industry to increase market share in China

newsaf.cgtn.com by CGTN18/12/2020  

South Africa's wine industry, will be looking to increase its market share in China after it imposed provisional new export tariffs on Australian wines.

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The move originates from anti-dumping concerns and will effectively see several duties imposed on Australian wines entering China. 

With Australian wines now subject to provisional export tariffs in China, it is South African labels which could be the biggest winners as CGTN's Travers Andrews reveals.

They could end up on the shelves of Chinese supermarkets and across e-commerce platforms, as the industry looks to grow beyond its 1 percent market share, on the back of new tariff duties on Australian wines  

The local industry has for many years looked to the Chinese market for much needed growth and this development, opens up new opportunities.

Maryna Calow, Communications Manager, Wines of South Africa says: "This is definitely a very big market for South African wine and one that we intend to explore straight away, our marketing manager in China, based in Shanghai, has already started discussions with various Australian wine importers, as well as bigger groups of companies and we really feel that is is a good opportunity for South African wine in the Chinese market."

It is the economies of scale that make the Chinese consumer wine market, such an attractive drawcard for the industry because growing beyond the current 1 percent market share, could lead to greater sustainability for the sector.

Traditional markets have been far from explosive but China is shaping up to be one of the most important markets for South African wines, especially red wine cultivars. 

Export Manager, Middle East and Asia, Van Loveren vineyards submits: "In China, that population is becoming more sophisticated with wine, so there is any opportunity there to sell, or even for them to experience better quality South African wine and also for me long term, I see there is a big potential not just for red wine, you know China is a mainly red wine market but also white wine."

The South Africa wine industry presence in China has been growing and so have Chinese investment in local wineries, much of which is situated in the Western Cape.

In the Franschhoek wine growing region, a lot of established farms already have their premium brands on sale in the Chinese market, many though have for years looked to upscale their volumes to the East.

The industry though believes while the tariff issue does open up some new opportunities, a long term approach to the Chinese market is what is needed

Miss Calow adds that: "In terms of our relationship with Chinese importers, I think it is important to thing to focus on for any South African wine exporter, is that of building relationships, it has long been known that relationships are key when it comes to your exporters and to ensure that they understand our country, our quality, where we stand and really having open lines of communication throughout the period, is most important, those relationship building exercises are what's going to see us through, in the longer term."

And as perennial winners of international wine competitions, many stakeholders believe the quality is there to back up the relationship, which could grow even further, in the near future.