by Saul Sugarman

Here’s my advice on exporting wine into China: don’t do it. The tariffs are high, customer preferences unpredictable, and there’s a reasonable chance the exporter will get swindled, or so I’ve heard. But if you still think selling to the fastest growing economy is a risk worth taking, the following are some tips to help ease the process.

Party like it’s 1999

I noticed only one common thread when talking about Chinese wine markets: they’re unsophisticated. Many cheap local blends are reportedly bad tasting and despite great strides, the foreign wines are still just breaking into China. So with the market still in its infancy, keep it simple, stupid. Some labels have seen promise simply by incorporating the word “kiss.” It worked for “Penguin’s Kiss,” a label that won first runner-up for “The Most Appealing Wine Label for Mainland Market” competition at last month’s Vinexpo in Hong Kong. Jana Harvey, who I spoke to a few weeks ago, is working on selling Scott Harvey Wines’ “One Last Kiss” in China. She was told the red on the label would be a big hit with the locals; I think it’s the whimsy lipstick smudge that will win them over.

It’s better when you’re French

While Napa Valley still screams exotic to many Chinese importers, France still beats California in the Asia-Pacific. An estimated 80 percent of consumed imported wine in China is French, said Crystal Lee, who markets wine in Hong Kong and China. Exports from France increased four times in China between 2004 and 2008, she said, with numbers continuing to grow. And think again if France is the only competition on your radar. Australia and Chile make solid runners up, with the U.S. trailing behind, capturing less than 15 percent of Chinese wine drinkers.

Know your limits

The number of rules for exporters can be dizzying in China. Aside from tariffs upward from 45 percent, there are limitations for how many bottles can be imported, and even restrictions for what can be printed on the label. The type of wine, ingredients, amount of alcohol, originating country, bottling date; all are bound by law to be on the label. The exporter’s company and name are in fact not required on the bottle, but it has to display the Chinese agent used to import the wine. In other words, use the wrong agent, and your concept could get stolen.

There are obviously a lot of obstacles to entering the Chinese market, but that hasn’t stopped many from taking the plunge. Two years ago 30 exporters supplied Shanghai with wine and now CNN says there are five times as many. Just be careful: entering China’s wine market could mean huge payoffs from the country’s growing economy, but your business may also end up at the bottom of the barrel.

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Saul Sugarman, a guest writer for winelabelsthatwork.com, is a freelance reporter and multimedia producer. Among many contributions, his work has appeared in Time Out, The Wall Street Journal, and Bloomberg News. He lived in Mainland China and Hong Kong between 2007 and 2010.

- http://hk.linkedin.com/in/ssaul