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2012 Feb 23
Foreign Cava Sales Beat Past Record
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Over 150 million bottles of Spanish Cava had been exported and sold to foreign markets in 2011, continuing the trend of the past decade. While foreign drinkers had been appreciative of Cava, the opposite is happening to the domestic market. Perceived more as a celebratory drink, the grim mood in Spain amidst chronic unemployment was not that accommodating.
Domestic sales for Cava in the last quarter of 2011 falls nearly 9 percent and took most by surprise. Despite this, Mr. Guillamet, chairman of Cava regulatory board, sports a cheerier mood. He pointed out that although overall (total) sales have slid 2% compared to 2010, foreign sales figure still shows a very positive outlook for Cava producers. According to figures by Wines From Spain, Spanish official wine promotion board, Cava export to China increased by 115% at first 9 month of 2011.
Furthermore, Mr. Mantella, managing director of Codorniu UK, the Cava industry leader with 60 millions bottles of annual production, points out that sparkling wine had been more prevalent on normal dining situation instead of only catering for celebration occasions. He also thinks that there is still much work to be done, considering that in spite the growing interest in the past decade, sparkling wine is still an insignificant minority compared to the still wine dominated wine market. |
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2012 Feb 22
Study shows that wine name affects tastes.
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Making up a tongue twisting name for wines seemed to be a way to boost sales, at least according to a new research study published by Dr. Mantonakis from Brock University. The study claims that wine consumers will like it more and would also be more willing to buy a wine with a name that is difficult to pronounce, at least for English speakers.
The findings was based on a controlled setting, where participants are required to taste the same wines with different names, followed by rating and specifying a price they are willing to pay for the each particular wine. The results showed that wines are associated with higher ratings if they have a more disfluent winery name.
Dr. Mantonakis explained that people have a natural knack to appreciate rarity, and this is in turn is associated with unfamiliar things that in most cases have a difficult to pronounce name.
Wine snobs should take note, because the findings also showed that participants with high wine-knowledge are more prone to the “name effect”, potentially disavowing any self proclaimed wine connoisseurs. Dr. Mantonakis however concedes that outside of the laboratory, the effect may not be so pronounced or reflected on the actual wine purchase. |
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2012 Feb 22
Alternative farming and closures explored by Chateau Margaux.
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At a recent seminar in London, Chateau Margaux revealed their intention to push forward with organic wine making and screwcap closure. Mr. Pontallier, Chateau Margaux winemaker and managing director, presented a total of 16 wines that he hoped would contrast the difference between conventional and alternative method of wine making and bottle closures.
Among the trade members participating in the event, most expressed preference for organic, biodynamic farmed ones, which is consistent to the Chateau’s expected outcome. Mr. Pontallier welcomed this result and points out that the winery only has a couple of years to go in achieving full organic farming for their legendary Bordeaux blend.
A same tasting last year shows that the audience prefers natural cork closures, but this year when tasters was asked to rank different closures for the estate’s 2nd wine, 2003 Pavillon Rouge, screwcap came ahead of cork.
Despite this, Mr. Pontallier said that a final conclusion is yet to be made because of the difficulty of replicating screwcap success over cork consistently. It is a daunting task to persuade everyone to agree on replacing cork with screwcap for a Bordeaux first growth with such stature and history. |
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2012 Feb 10
China consumer leads the world in spirits consumption
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A recent Vinexpo report shows that the Asia Pacific region drinks an overwhelmingly large share of the total volume of spirits consumed around the world. The Americas (North and South) was second with 15%, but Asia Pacific deservedly held the crown with a 59% share. A fall of consumption volume was recorded in Europe between year 2006 and 2010, making local producers anxious for new markets to sell their products to.
China is the biggest spirits-consuming country in the world currently, but foreign spirits imports are of miniscule proportion compared to the domestic favorite, Baijiu and the various rice-based liquors. Spirits consumption in China increased at a staggering rate, a 59.28% increase by comparing figures between year 2010 and 2006, leading to the industry-wide excitement in the huge market potential which China offers. |
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2012 Feb 2
Hong Kong ready for Vinexpo Asia Pacific 2012.
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Vinexpo Asia Pacific 2012 once again returns to Hong Kong, with the most impressive booking result to date with no stand space left as of last December 2011. It was sold out 3 months faster than the previous event on 2010.
The upcoming event on 29-31 May 2012 is expected to reach new grounds, if the shattering of visitor and exhibitor records at 2010's Vinexpo Asia-Pacific is a good indicator of what to come.
The maturing taste for wine in the region prove to be robust amidst the turbulent world economy, and expected to contribute the lion share of growth of wine consumption in the next five year. This is not news to the wine producers all over the world, and they are coming in throngs to the exhibition, with the French filling up the biggest share of stand space.
With a 20% increase of floor space, the event plans to accommodate nearly one thousand exhibitors. South Afica, Australia, New Zealand and USA stands is back and bigger while traditional producers from Spain and Italy is not giving up the fight yet. Featuring big names like Baron Phillipe de Rothschild, Gonzalez Byass and Concha y Toro, this is a show not to be missed!
For further info, please visit www.vinexpo.com |
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2012 Jan 19
Chinese wine smuggler sentenced to life in prison
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The biggest wine smuggling case in China recently concluded with a life imprisonment sentence for Mr. Sun Xitai. The wine smuggler is convicted for evading duty on wines allegedly to be worth up to 7 million USD.
Sun was active during January 2004 and December 2009 and had smuggled up to 70,000 bottles during that period. Since the Chinese customs duty of nearly 50% is assessed based on invoiced value, Sun declared wines at far below market prices and lied about the names of wine.
A Chinese report in "Legal Daily" said that this was not new, since many people files false declaration and forge fake invoices in order to achieve a lower duty payment. Meanwhile the porous Hong Kong/China border have also brought to a boom on the human mule trade, wine being one of the commodity being smuggled in backpacks/trolleys everyday across the border.
As of lately, the China government had been cracking down on these illicit activities and so far there have been some mixed successes. One thing for sure that it is highly recommended for businesses to follow the legitimate importing channels to China.
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2012 Jan 16
China's Lafite Craze Subsides, drops nearly 50% from peak
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Used as a barometer for the overall world fine wine market, Lafite was the clear market leader in value growth/retention and the forerunner of the Bordeaux price explosion in the recent years. The recent dip though dispelled the myth of the unassailable Lafite, bursting the huge bubble that has grown with insatiable demand from the Chinese and money from speculators and traders.
Chateau Lafite 2008, once highly valued due to the auspicious Chinese character "Eight" etched on the bottle, was by far the biggest loser, losing nearly half of its value since its peak on March 2011. The flip side of the coin is that Chinese suppliers of forged Lafite bottles, labels and corks had been hugely affected with some reporting zero orders for year 2012.
Some industry observers still anticipate a further drop on the fine wine market, warning that this is just a start on the long road of price adjustments. In China, many have started to venture out of Lafite and top growths, and the Chinese consumers have been maturing rapidly in their tastes and also spoiled with the sheer number of choices in the market.
One of the good news from this aside from cheaper wines, is that the vast Chinese underground industry of fake wine making and forgering had been hit hard. It will be quite some while before forged Lafite and copycats like "King Lafite", "Lafite Dynasty" flood the markets again.
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2012 Jan 11
China is fifth largest wine-consuming nation, displacing UK to sixth.
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China had displaced UK to reach the fifth largest wine-consuming nation, according to the 2011 study by IWSR (International Wine & Spirits Research). China and Hong Kong wine consumption combined grew by a third in the period between 2009 and 2010, continuing the phenomenal growth in the past.
Foreign wine producers facing with a weak home economy and saturation of domestic and the usual markets have been very eager to ride on the trend in China. Many is convinced that the potential is still huge despite the growth in recent years, as China wine consumption per capita is only 2 litres, compared to the French which consumed 50 litres each.
The study also announced USA as the largest wine consuming nation, with a per capita consumption of around 13 litres. While these markets are large, none are as exciting and profitable as those in China. Exponential growth is forecasted, with a further 54 percent rise between 2011 and 2015.
Meanwhile the global wine consumption growth rate is also expected to grow modestly for a rate of 6.17% for the next 5 years, with China contributing the major share of it.
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2012 Jan 2
Profit down by half, Dynasty rethinks strategy 02.01.12
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China's leading wine producer Dynasty Fine Wines recently announced a lower than expected profit for the first half of 2011, a 54% drop from past year figures. As one of the earliest joint venture in modern Chinese history, Rémy Cointreau entered into the Chinese wine making industry in 1980, with the partnership of the city of Tianjin government.
The results came as a direct testament to the fierce competition foreign made wines pose to the relatively young and underdeveloped China market. A rethink of existing strategy is underway, where Dynasty's distribution network and sales channel are reorganized. The company plans to increase its direct sales outlet from the existing 60 to over 160 in the end of 2012.
In order to fight off what was perceived as the more superior wine from overseas, Dynasty decided to redirect production resources to premium wines, which is expected to grow to one-fifth of total production volume from the current state of 10 to 15%. Mr. Huang, executive director of Dynasty Fine Wines, is confident that these changes would lead to a promising improvement of the corporate financial results in the near future.
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2011 Nov 11
Wine trade reaching out to Chinese inland cities.
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A recent Bordeaux top growths wine tasting event in China had been flooded with 2000 visitors instead of the 700 as previously anticipated. Some may guess that the event was held in the wealthy coastal region of Shanghai, maybe Guangzhou, but in reality the venue was in Chengdu, a city in the western region of China far away from the coast.
Eye watering profit margins and potential for growth had attracted many to the wine business, and the battlefront have also been pushed westward, from the 1st,2nd tier coastal cities to the inland 3rd, 4th tier ones. This had the effect of reshuffling and redistributing profits from the wine value chain to both new and existing wine distributors, importers and wholesalers.
Guangzhou, the biggest wine consuming market in China, is still the major trade platform for imported wines. Miss Shen, COO of the organizer of Guangzhou Interwine Exhibition, expressed that while large and renowned wine producers could secure importers and sales channels with relative ease, many small to medium size wineries had been struggling with the unfamiliar Chinese market. They would prefer to go further inland instead of competing in the already crowded major cities.
Sensing better opportunities, some lesser known wine producing regions had been actively organizing events to promote and educate in 2nd or 3rd tier cities with support from the local governments. The unexplored inland cities is the way to go for new comers to the Chinese wine market that aims for higher margins and lesser competition.
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Make sure to get you wine shipment insured especially when shipping fine wine, most shipping lines and airlines provide limited liability only. |
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