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Wine exports to China rise despite tariff threat

Several different experimental wine varieties are bottled by Constellation and presented at growers meetings for tasting and feedback
The Wine Institute and Compli have launched a wholesale rules compliance portal.
U.S. shipments, 90 percent of which were from California, rose 14 percent in the first half of 2018.

Despite looming tariffs, wine shipments to China from American ports rose 14 percent in value in the first half of 2018 compared to the same period last year, according to the San Francisco-based Wine Institute.

U.S. exports -- 90 percent of which were from California -- totaled $38.4 million during the period, buoyed in part by promotional efforts by the industry.

“California vintners have a long-term commitment to the China market, and Wine Institute continues to execute a full slate of promotional activities there to support our wine exports,” Linsey Gallagher, Wine Institute Vice President of International Marketing, says in a news release. “While increased tariffs are challenging, Chinese consumers are clearly attracted to California wines and appreciate the high quality and great diversity of wines from the Golden State.”

Total U.S. wine exports worldwide were up 2.7 percent by value to $708 million through June, according to the release. By volume, exports rose 1.7 percent to 21.3 million cases for the six months.

The increase follows a modest dip in overall shipments in 2017, as U.S. exports for the year reached $1.53 billion in winery revenues and 380 million liters (or 42.2 million cases), according to the Wine Institute. Golden State exports were down 5.5 percent in value and 7.9 percent in volume, a dip the institute blamed on such factors as the strong dollar, heavily subsidized foreign wine producers, and competitors reaching free trade agreements with key markets.

The boost in exports to China comes even as tariff increases there began to suppress trade. For instance, LangeTwins Family Winery and Vineyards near Lodi, Calif., reported in April that the 15 percent additional tariff on wine entering China had already resulted in one order being canceled and another — a shipment of 700 cases — being put on hold while the two parties negotiated who would pay the tariff.

In August, China threatened to impose an additional 25 percent tariff on U.S. wine exports in response to tariffs President Donald Trump's administration proposed as part of a dispute over intellectual property. Bulk wine imports to China would face an additional 10 percent duty.

The Wine Institute’s California Wine Export Program team in China has been holding educational "master classes" in cities throughout the Asian nation, according to the release. A vintner tour in October will include stops in Hong Kong, Macau, Guangzhou, Shanghai, Chengdu, Wuhan, Taipei and Tokyo. The group also plans a strong presence at the ProWine China trade show in Shanghai Nov. 13-15 and also at the Tang Jia Hui Trade Show in Chengdu March 26-28, 2019.

TAGS: Marketing
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