Charming Chinese Wine Buyers; Local Estates Turn Sales Efforts to the World's Largest Market

Cape Times (South Africa), July 2, 2014 | Go to article overview

Charming Chinese Wine Buyers; Local Estates Turn Sales Efforts to the World's Largest Market


BYLINE: Dylan Griffiths

WHEN 45 alumni of Tsinghua University, the alma mater of China's previous two leaders, stopped at La Motte vineyard near Franschhoek two years ago, they ordered R1.5 million of wine to take away.

That spurred chief executive Hein Koegelenberg to tap the Franschhoek valley's Huguenot heritage to challenge the dominance of French vintners in China.

Koegelenberg, brother-in-law of Richemont chairman Johann Rupert, plans to boost exports to China by 25 percent this year after, in August last year, he lured the first Chinese investors to the country's wine industry.

"China has the biggest market potential by far," Koegelenberg said in an interview at La Motte, which is owned by his wife, Hanneli. "We planted vineyards at the same time as those in Bordeaux and South Africa is producing some of the best wine in the world."

Koegelenberg turned to Asia after the credit crisis derailed his plans to work in the US. While a crackdown by President Xi Jinping on corruption and the practice of gift giving hurt Chinese wine sales last year, the nation's consumers overtook the French to become the biggest drinkers of red wine in the world, according to Vinexpo, an exhibition organised by the Bordeaux Chamber of Commerce and Industry.

"Gifting is still huge, but you have to identify the right people," Koegelenberg said.

His biggest clients are two Chinese entrepreneurs living in Malaysia, who each buy 500 bottles of Hanneli R, which costs up to R1 000 a bottle before loading at Cape Town.

"It can only be expensive if it's exclusive."

La Motte and neighbouring Leopard's Leap vineyard, which Koegelenberg owns jointly with his wife, were drawing on Franschhoek's Huguenot history to break into China's premium wine market, he said.

Koegelenberg also used former president FW de Klerk to market wine, selling 10 000 magnums of Presidential Reserve for $35 (R370) each to his Chinese distributors.

"It's a win-win," he said. "People like to have pictures taken with the president."

French producers account for about 45 percent of China's $1.5 billion wine import market, triple the share of second- ranked Australia, according to the Paris-based International Organisation of Vine and Wine.

South African winemakers, with 2 percent of the market, had a lot of ground to make up, Koegelenberg said.

"We are nowhere in China," said Koegelenberg, who plans to increase shipments by a quarter to 1.75 million bottles this year.

La Motte, Leopard's Leap and the latter's L'Huguenot brand joint venture with Yangzhou Perfect of China accounted for more than 25 percent of South African wine sales to China, he said.

South Africa is the world's 11th-biggest exporter by value in a ranking led by France and Italy, according to the International Organisation of Vine and Wine.

The UK, Sweden and Germany were South Africa's biggest export markets for bottled wine in the 12 months to May, with China ranked just ahead of Angola in 10th place. …

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