Opportunity Lost - The Mind Boggles

Opportunity Lost - The Mind Boggles

Due to their massive populations and the increasing affluence and growth of the middle class, China and India are two markets with huge potential for growth in wine consumption; indeed many pundits think those two markets have the worlds biggest potential for growth.

At the end of May the Vinexpo 2006 event was held in Hong Kong. The event boasted the regions largest range of wine (and spirits) ever presented under one roof; there were five hundred and sixty-eight exhibitors from twenty-eight countries with 60,000 bottles of wine available for tasting.

One could be excused for thinking that Australian producers would be well represented at this event but that was not the case. According to the exhibitors listing, there were only three, that’s right folks, only three Australian wine companies represented at the show; Cape Mentelle, Green Point (Yarra Valley) and New Holland Wine Company (an Aust export company,) yet it was good enough for the likes of Guigal, Fonseca, Dr Loosen, and a myriad of Champagne Houses to attend.

If you can believe what has been written, the three previous shows were very successful so there was no reason to think this would be anything other than a success. According to the final press release, approximately 6,800 trade visitors attended, including importers, wholesalers and retailers to duty free buyers, and food and beverage professionals, with an estimated 39 percent of visitors from Hong Kong/Macau, and the remaining 61 percent from the rest of Asia; the biggest contingent from Asia-Pacific (non Hong Kong) visitors were led by China.

That sounds like a pretty reasonable attendance for a trade show, but it gets better. There were also over 300 journalists from all over Asia covering the event, as well as correspondents from Europe and the United States.

According to Mark Cohen of Malesco Wine Brokers, an agent located in Adelaide, who attended the event, “there was lots of business conducted and many deals completed.” Mark was mystified by the lack of interest in this event from the Australian industry.

Dave Brooks, well know internet wine identity who has a web site called Vinosense, and works at Langton’s also attended. Dave said “Vinexpo was well run and worth going too; there were some great wines on tasting and crowds no where near what they get in Bordeaux, but certainly very healthy for an emerging market. The Aussie attendance was a let down. Red & White had a stand so Brokenwood and Mount Langi were there and the Moet Hennessy Group had Cape Mentelle etc, but it seems slack when you consider all the doom and gloom in the industry. Argentina had a huge stand with all the rising stars exhibiting, and even South Africa, which was poorly represented, had more representation than Australia.

The venue was good. It was a ‘business’ show for the trade with no general public attendance. Sometimes some of the smaller stands weren’t even manned as many of the buyers and sellers had made appointments with each other, and they were sitting down have a wheeling and dealing pow-wow. There was a lot of serious business happening.”

Chile was well represented with a mixed bag of producers including Concha Y Toro; and Carlos Zapata from Argentina even had an independent stand. The USA, particularly Washington state was well represented, and according to Mark Cohen, their wines were looking pretty smart.

France thought the show was good enough, and important enough, to go to the trouble of putting out a 125 page book for the consolidated stands; and on top of that, the Premium Class producers also had their own single stands. Italy also managed to put out a 112 page book (with accompanying CD) about their producers. Spain was also strongly represented with great Ribera Del Duero stuff, and surprisingly good newcomers like Anto. Even German Rieslings were represented seriously; their stands were holding major tastings. Apparently the Asians will drink c-through!

Mark Cohen told me, “There was strong buyer support from most Asian regions, and we met with importers from Malaysia, Singapore, HK/Macau, Taiwan, Thailand and China. There appeared to be two types of buyers; many in the bottom-feeder segment ($2.00 a bottle FOB side of things) which Australia doesn’t really address that well, but there were also the Premium and Icon buyers; the sort who are after Parker, WS, and Langton’s top producers. There is wealth in Asia, and they are paying for quality.”

Dave also mentioned two other points. Firstly there were a lot of overseas producers who were using the event to try and move wine into Australia and let’s face it, the more imported wine we drink, the less local produce will be sold. Secondly, Dave also thought the lack of Australian representation was very short-sighted, and whilst the Asia Vinexpo isn’t as big as the French one or the London Wine Show, it was a fine event in market that has huge potential. He said, “Marketing dollars are tight, everyone knows this, but why couldn’t the individual wine regions, like Coonawarra and Margaret River for example, have a regional stand at the event in the same was as they do at Wine Australia. That can be a very cost effective way to promote themselves into this market that will become hugely important to us as producers. Our complacency doesn’t make sense.”

Frankly, I am flabbergasted at the apathy from our industry, especially given that it seemed like such a successful event. When you consider the Asia market has the greatest potential for expansion; that Australia has a huge surplus and over-supply of wine; competition at a local level is causing profitability pressures for many suppliers; that the Australian segment of the premium market in the lucrative US market is heading for trouble; one can only wonder at the reasons for the poor attendance by the Australian producers. Heck, that show was good enough for some of the greatest wines brands in the world to attend, yet the Australian producers did not deem it enough of an opportunity to be represented.