China FTA Talk with Wine Australia

China FTA Talk with Wine Australia

Featuring Willa Yang – Regional Manager China, Wine Australia

Wine Victoria (WV): Has Wine Australia reconsidered its strategy in China considering the new FTA in this market?

Willa Yang (WY): We haven't made huge adjustment to our strategy in China but we hope to put more resources in China to grab the potential opportunities. Our priorities include building the premium image of Australia through promotion of a fine wine culture, growing the Australian wine category through multi-channel development - both on and off premise - and increased engagement with key influencers including trade, media and consumers.

WVWhen does Wine Australia expect to see a shift in the market as a result?

WY: As a result of the China Australia FTA, the tariff duty (currently at 14%) will be gradually reduced starting from end of this year up to 2019 when it will be reduced to 0%. This will encourage a positive sentiment towards Australian wine, however the reduction of the tariff duty is limited and importers still need to pay 17% VAT and 10% consumption tax. We think the real shift will happen in another year when the tariff duty starts to reduce, but it still won't be a large shift.

WV: What can Australian wine exporters do to best take advantage of these opportunities? What advice can you give to producers considering entering into the Chinese market for the first time?

WY: It's now a good time for Australian wine exporters to enter the China market. In order to take advantage of these opportunities, they need to have a long-term strategy for China, not just trading without supporting their partners in China. They need to work together to present and promote the branding of Australia or their region in a unified form, rather than individual promotion as the latter is more costly and has limited influence. Chinese consumers may only remember a few wine brands from around the world, however regions/countries are more easily remembered. This is why there are a growing number of collective promotions for regions and countries nowadays. Important events in China like key trade shows and consumer activation events organised by Wine Australia will help deliver a strong 'story' to the Chinese audience. For first time exporters, if they want long-term business, it is also important for them to come to China to learn the market and their customers rather than selling to someone who they have never met.

WV: How is Victorian wine perceived in the Chinese market, if at all?

WY: Victoria as a state has limited recognition in China in terms of wine compared with other wine producing states. However, some people do know regions like Yarra Valley or the Mornington Peninsula, often through previous travel to Australia. What Victoria can do is focus on some of the key regions from Victoria rather than all 21 regions to make it easier for consumers to remember. It's a good idea to combine wine with other sectors like food, lifestyle and tourism.

Wine Australia recently released their 5-year strategy. The strategy can be found herehere