Down Under blunders? Do people in China equate wine with Penfolds? And is Australia close to France in imports?

*P*enfolds, not *B*enfolds...

*P*enfolds, not *B*enfolds…

~

By Jim Boyce

By almost any measure, Australia is a success story when it comes to wine imports in China. It has been the second biggest source of bottled wine for many years, sitting behind only France and besting major players like Italy, Spain, Chile and the United States. It is increasingly doing well in terms of value per bottle. And consumers are gaining more awareness of major brands like Penfolds, Jacob’s Creek and Wolf Blass as well as smaller ones.

But the reality is that Australia is losing market share. In 2006, it took a nearly ~23 percent share, close to France at ~34 percent, and more than double any other competitor. By last year, it had slid to ~13 percent, far behind France at ~48 percent and just ahead of Spain at 10 percent.

Even so, volume and value are growing and Australia is in enviable position. But not so enviable as a couple of quotes in the media suggest. Note: I’m well aware that the media sometimes misquotes or takes people out of context, but these quotes are out there and worth addressing.

1

The Australian quoted Tourism Australia managing director Andrew McEvoy as saying, “In China you say wine and they say Penfolds.”

Really? Who says that?

I said “wine” to a bunch of people I know in China and none of them said “Penfolds”. Not one. Some said “red“, one said “Lafite” and one said, “You mean, right now?” But no one said Penfolds.

I also went to social media site Weibo and posted: “Wine friends in China: When I say the word “wine”, what is the *first* word you think of?”

The answers included “red”, “life”, “ganbei style!”, “wine blogger”, “smile”, “do not be drunk” and, for about ten people, “cheers“.

For some people, one word was not enough. One person wrote, “Most of the time [when] I hear the word “wine” from our Chinese fellows it sounds like ‘WIN’. So the first word I think of is ‘NO'”, while another posted, “A glass of red wine in a old fashioned Whisky rock [glass], with a plate of Gongbao Jiding… somehow like in my home.”

Again, no one said Penfolds. Just saying.

2

The Drinks Business quoted Darren Rathbone, of eponymous Rathbone Group and co-owner of China-based importer and distributor The Wine Republic, as saying, “In terms of imports into China, France is out in front, but Australia is a close second in both volume and value sales and considerably ahead of Chile.”

Really? Because the numbers from Customs tell a different story. As noted earlier, Australia is nowhere near France in terms of volume and has been falling behind for years. And while Australia does well in terms of value per bottle, France crushes it in terms of overall numbers.

Also, Australia only sends 60% more bottled wine to China than does Chile, so I’m not sure how that is considered “considerably more” when being 400% behind France is considered “close”. And Chile isn’t even in third place. Spain holds that spot. It is considerably close to Australia for volume at 10 percent.

I realize I am picking and choosing quotes here. And that both of these guys might have been misquoted or taken out of context. But I also realize people often take such quotes as face value and so, for what it’s worth, I simply want to note that neither rings true to me. In fact, when I hear Penfolds, I think, “Soon to have Chinese owners?”

2 Comments on Down Under blunders? Do people in China equate wine with Penfolds? And is Australia close to France in imports?

  1. Paul Henry // February 26, 2013 at 4:22 am //

    Hi Jim

    I know you already know this well – and it is implicit in your article – but I am not all sure that chasing market share is necessarily a good strategy for any category. In fact, I would say it has been Australia’s undoing in the recent past, particularly in mature markets like US and UK – would have been be better to cede ground in favor of profitability…
    Still, Australia manages a higher share of >$10/litte bottled market than France – a more meaningful stat in my opinion for a category that oftentime confuses dominant share with sustainable success. Cheers to you! ph

  2. Alberto // March 4, 2013 at 4:18 pm //

    And many of those imports were made as part of immigration programs! Don’t think this will bring a long-term success brand building! Specially once after those Chinese traders have moved to Australia!

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