NEWS
DESPITE HIGH TARIFFS, AMERICAN PRODUCERS KEEPING FAITH ON CHINESE MARKET
By David Ma
20-6-2019
Despite having been repeatedly hammered by punitive tariffs levied by Beijing as a result of the tit-for-tat trade war between USA and China, many American wine producers are still keeping faith on the Chinese market, according to a report published by China’s Xinhua News Agency.
The news agency quoted Michael Parr, vice president of international sales for Wente Family Estates, as saying that they have maintained faith on the Chinese market and are confident that the tariffs will eventually be lifted.
The California-based Wente Vineyards is the oldest family-owned winery in the United States, it has been exporting wines to China for 25 years.
"We will maintain relationships with our importers in China. We are in communication on a regular basis."
"We haven't lost faith completely. I'm confident that eventually these tariffs will be lifted and we will be back in the market. "
"It's the future opportunities that we feel we might lose out on," Parr was quoted by Xinhua as saying.
Parr said they have significant room for development in China, but the frustration with the tariffs is withholding them from expanding beyond the current market share.
For every bottle of Wente Wine that has been depleted on the shelf in China, there are dozens of wine producing countries that are competing for that same shelf space, said Parr.
Some of the biggest wine producing countries, including Australia and Chile, now have free trade agreements with China.
"Those wines can go into that market duty free, and here we are at a tax rate of 93 percent, that's far from a level playing field for US wines," said Parr.
On May 10, President Trump increased tariffs on USD200 billion worth of Chinese imports from 10 percent to 25 percent, and has threatened to raise tariffs on more Chinese imports. In response, China raised additional tariffs on a range of US imports including wines on June 1.
President and CEO of California wine trade body the Wine Institute Robert Koch said that each additional round of tariff has made it "more and more difficult" for California wines, which accounted for over 90% of US wine exports, to compete in "the fastest-growing wine market in the world."
"Overall the US wines have seen a very positive perspective in China and the industry has been working hard in the market over the past years. Often times, we are seen as being expensive, but quality driven," Koch said.
"It is imperative to resolve this dispute as soon as possible, so that our wineries do not suffer long-term market loss," Koch added.
The Wine Institute said it would continue with marketing efforts as well as educational and promotional events in China to maintain the market influence of California wines.
Last year, the organisation carried out a slate of promotional activities in China, including a new round of "Master Class seminars" and California wine tasting events.
(the writer can be contacted at: DavidMa@thewinechronicle.com)
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