Wine venture with China plans to win hearts for tourism

PERFECT Wines of South Africa, the first joint venture between a Chinese company and a Cape wine producer, plans to export 1.4 million bottles of wine this year to China – where the market is dominated by French wines.

The chairman of the joint venture is Hein Koegelenberg, the chief executive of the La Motte and Leopard’s Leap wine estates.

The wines will be sold in 5 000 outlets all over China, where Perfect Wines has already sold 2.8 million bottles in the past two years.

To encourage the most successful of its salespeople in China, Perfect Wines is bringing 700 of them on an incentive tour to South Africa at the beginning of next month and will give a gala dinner for them at the Cape Town International Convention Centre.

Koegelenberg said yesterday that this would mean three planeloads of passengers flying on from Johannesburg’s OR Tambo International Airport to Cape Town.

His company was working on the task of finding rooms in five-star hotels in the city, and Perfect Wines planned to repeat the exercise every year.

Koegelenberg said the salespeople bought the wines and resold them in China, Hong Kong, Taiwan, Malaysia, Thailand, Indonesia, Singapore and Vietnam.

French wines dominate the Chinese wine import market, supplying 48 percent. Australia is in second place with 13.5 percent while South African wines have a 1.9 percent market share.

The Chinese government encourages imports of wine. It wants to discourage the people from drinking a local beer made from rice, which it sees as a threat to food supplies. China recently threatened to review EU exports, including wine, in retaliation against tariffs on Chinese solar panels.

This week China agreed to discuss dropping its inquiry into whether Europe was dumping wine after EU and Chinese officials made a deal to avoid tariffs on solar panels from China, Reuters reported.

Bringing Chinese customers to the Winelands will turn them into ambassadors for SA.

Koegelenberg said his company started wine exports to China two years ago and had sold 2.8 million bottles since then. Although the demand in China was still mainly for red wines, sales of white varieties were growing as consumers realised these were the best accompaniment for seafood.

The joint venture between his wine estates and Perfect China has bought the wine cellar at the Val de Vie estate in the heart of the Winelands between Paarl and Franschhoek. Its exports are marketed under the L’Huguenot label.

“Now with its own address, production and maturation facilities, the future looks very promising,” Koegelenberg said.

“This venture also focuses on tourism from China. Bringing Chinese customers and letting them experience the beauty of our Winelands will turn them into ambassadors for South Africa.”