KEY POINTS:
Middle-class Chinese with a penchant for fine wine simply can not get enough Hawkes Bay red.
Earlier this year the most expensive container New Zealand wine producer Babich Wines has ever sold was sent to China's Guangzhou province.
General manager David Babich said the company cannot keep up
with China's demand for the rare vintage tipple from the Hawkes Bay.
"They wanted more but we didn't have it, they will have to wait until the next vintage matures."
He said the sale presents the Hawkes Bay with an export destination, which has not been apparent until now.
China's interest in New Zealand wines had been growing over the past few years, but has accelerated over the past six months, he said.
A year ago Babich Wines appointed two agents in China while it was over there working with New Zealand Trade and Enterprise one agent is a national distributor, and the other has higher-end contracts in the Guangzhou province.
Babich said it was a crucial step towards cracking the market. Before establishing the agents the company had sent pre-paid containers of wine to China as they were demanded.
"There's a really strong development of the middle class in China, they are looking for ways to spend their money and they are looking to the West, wanting to do what the Westerners are doing," Babich said.
Rather than drink the lower-priced Chinese wines, these consumers are demanding Western wine with the highest available price-tag, he said.
When they found expensive French wine producers were not prepared to send China everything that they had, the Chinese looked towards areas like the United States, Australia and New Zealand, Babich said.
Babich said the New Zealand wine industry has been short of product to sell since 2000, and so has been growing its markets at the rate that could supply them.
"We were seeing phenomenal growth into our core markets and we were growing those markets as we had new stock and as we saw potential. Five years ago China was sitting there as something we could do in the near future but we were not going to be too proactive about," he said.
Babich exports wine to 35 countries, and 80 per cent is Malborough Sauvignon Blanc or Pinot.
China presents a different market because of the red wine it is after. Babich said: "Chinese are very positive about anything with any health benefit and red wine certainly has that. Hawkes Bay is sitting in an extremely good position to service that demand."
Babich Wines sells about 300,000 cases of wine per year, and though the 1,000 cases scooped up by this deal is not much in terms of volume, only small amounts of the expensive, hand-made wines can be produced.
"It takes several years to increase your volume, to start supplying that demand," Babich said.
He said Babich Wines had increased the volume of their top-end Patriarch and Irongate wines this year but the bottles would not mature until 2011.
Sam Lewis, director of New Zealand Trade and Enterprise's Food & Beverage Taskforce said China is New Zealand's food and beverage industry's fifth largest market and one that is growing strongly.
"There's a huge amount of development in the Shanghai and Beijing food service sector in particular, with investment in premium five star hotels presenting a lot of top-end opportunities," he said.
