South African winemakers are luring drinkers in the lucrative China market after Australian wines’ exit under the anti-dumping tariffs. To capture Chinese drinkers’ hearts, AM vineyards, a winery from the Cape, is producing wines specifically tailored to “meet the needs of the Chinese palate,” it has announced.
While China’s wine imports hit historical low in 2021, South African wine exporters like AM Vineyards are set to impress Chinese drinkers as they see a golden opportunity “to fill a significant gap” after Australian wines exit last year.
Instead of reallocating their existing wine ranges, AM Vineyards, with six vineyards in Cape Winelands region of South Africa, took a step further and launched the new Karan range to please the Chinese palate, in hope of grasping China’s lucrative market of 50 million wine drinkers.
The winery’s pivot to China also came at a time when South Africa itself was faced with a wine glut problem caused by repeated export ban and Australia’s exit in the Chinese market that left 40% market share up for grab.
In South Africa, since the start of pandemic the country has issued four alcohol sales and export bans, which caused the piling of 400 million wine bottles that were suddenly cut off from exports.
Around the same time, the Chinese government increased its tariff on Australian wines to as high as 218%, leading to more than 90% year-on-year drop in Australian wine imports.
China’s high import tariff doesn’t apply to South Africa, and this means “there was a substantial gap to be filled”, according to the winery.
With South Africa’s wine glut and the void left by Australian wine exit, South Africa’s wine exports to China boomed. South African wine exports to China soared 193% in volume and 125% in value in 2021, making it the 8th biggest wine exporter of China, according to China Association for Imports and Exports of Wine and Spirits (CAWS).
But carving out the Chinese market is not a one-tick pass, especially when the well-established wineries from other major exporters such as France and Chile already had first-hand knowledge of the country’s complicated import system, sales channels and market preferences.
What backs Matthew Karan’s confidence on the Karan range was his over 20 years of experience working in Karan Beef, South Africa’s leading beef suppliers.
As the business has doubled beef export volumes to China in recent years, Karan, the director of Karan Beef, not only gets more familiar with the logistics and regulations in China, but also the culture and consumer preferences.
“Despite being a relatively new wine-drinking nation, Chinese customers know what they like and want,” says Karan. “For instance, we know they have a strong preference for eating red meats, particularly fine beef, so we created our Chinese export wines specifically to pair with the high-quality beef we know they like to eat.”
For the wines to pair well with beef, the new Karan range comes with two bold Bordeaux-style reds – The Collection and The Selection – with medium to full bodied and fruity flavours.
The Collection is a blend of Cabernet Sauvignon, Merlot, Shiraz and Tannat, while The Selection is made with Pinotage and Cinsault grapes.
The winery also solely chose red wines for the range instead of white, believing that the colour red is associated with happiness, success and good fortune in China, it explains.
The Karan range is already being distributed through Karan’s existing export channels that focus largely on high-end restaurants and hotels. With harvest currently underway, AM Vineyards plans to add more blends in the Karan range in the future.