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CONSOLIDATION FOR CHINESE WINE IMPORTERS PREDICTED

CONSOLIDATION FOR CHINESE WINE IMPORTERS PREDICTED

Our CEO, Hein Koegelenberg recently blogged about an article in the drinks business about predictions that China's wine importers are facing a period of consolidation after rapid expansion.

Koegelenberg writes:

“I am concerned that we could get an oversupply of wine coming from the massive imports from some of the new importers,”  Chilean winemaker MiguelTorres told the drinks business. “We have started to see that some of the local companies are retreating from the market after just two to three years of being operative and other international companies are more reluctant to start in China.”

Torres, who has invested heavily in building a distribution network in China, said he believed the correction would happen over the next two to three years and would benefit the professional players, a view supported by others.

I agree with this. At La Motte and Leopard’s Leap we have sent a lot of time making sure that we only partner with the best and most established distributors in China.

The drinks business went onto to report that the balance appeared to be shifting between foreign and domestic owned importers and distributors. “Chinese companies such as the massive state-owned COFCO are capitalizing on their established distribution networks to supply foreign wines,” the trade journal reported.

“We estimate that foreign suppliers are today dominating less than 15% of the market for imported wine, but this figure was closer to 50% a decade ago,” Torres told the drinks business. “But there are also a growing number of joint ventures, some linked to distribution and retail.”

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