French Wine Exports Will Decline 20%, Winemakers Say

By Ladka Bauerova - Bloomberg

French wine exports will decline at least 20 percent this year as wholesalers become reticent to restock during the recession and consumers drink less in bars and restaurants, industry executives said today.

Sales are suffering in the U.S., U.K. and Japan, Claude de Jouvencel, head of France’s Federation of Wine Exporters and chief operating officer of Grand Marnier, said after the signing of an agreement with the French customs office and the Finance Ministry to assist winemakers with obtaining
medium-term loans. Champagne makers will also see a 20 percent decline in sales by volume this year, according to Yves Dumont, the non-executive chairman of Grand Siecle producer Laurent-Perrier SA.

“High-end wines are suffering the most,” de Jouvencel said in an interview. “Next year will remain difficult, but we may see a little growth since the stock will be readjusted.”

Revenue is falling in Russia where many wholesalers, unable to get credit, have fallen behind with payments, de Jouvencel said. Growth in China has been reduced by half, while sales are stagnating in France, he added.

LVMH Moet Hennessy Louis Vuitton SA, the maker of Dom Perignon, said in April that champagne sales by volume plunged 35 percent in the first quarter as drinkers chose to economize with cheaper sparkling wines.

The customs office has pledged to provide fiscal data on individual winemakers as an additional guarantee to banks.

“Some winemakers have had trouble financing their day-to- day operations because banks would give them only one-year loans,” Jerome Fournel, the director of the French Customs Office, said in an interview. “This will help them get the financing they need against their wine stock.”

[Source] -- Bloomberg

Stina's Cellars of Washington State break into the Chinese market

The concept of "sister cities" is something I first learned about when Wikipedia came online a few years ago. When you "wiki" a city, it conveniently provides you a list of sister cities.

For instance, when living in Suzhou, China I "wikied" the city to learn some random facts. Suzhou's sister cities in the United States include such places as Jacksonville, Florida and Portland Oregon. Go figure?

The concept of sister cities never crossed my mind again, that is until I read this great article and learned that Stina's Cellars, a vineyard from Tacoma, Washington managed to break into the China market via their sister city of Fuzhou, China.

After three consecutive delegations of representatives from Fuzhou, China visited the vineyard and sampled the wine, calls started coming in and Stina's Cellars suddenly found it self with 224 cases in new orders from a market they never thought they would be selling to. One importer recently emailed the Washington Vintner and asked "What’s the maximum capacity of the winery? I want to know how much I can get."

Vintner Perry Preston - Stina's Cellars

It is clear there is untapped demand in China for a variety of products. The real challenge for vintners, agents and exporters is to find away to connect buyers and sellers. There are websites like Alibaba and Chinabusinesworld, but the internet only extends so far.

Here are a few excerpts from the article:

“When I got the call about the tastings I was like, well, it was worth taking a chance on,” Preston said. “The market over there is expanding, and I want to expand. Hopefully, we’ll be able to expand together. And it was just one city, instead of all of China. If it would have been all of China, I would have said, ‘No thanks.’”

About a month later Preston learned that the population of Fuzhou tops 6.6 million – slightly larger than the state of Washington.

To say Perry and Penny Preston, and their son, Ethan, grew Stina’s Cellars from humble beginnings doesn’t do justice to their story.

The old joke in the wine industry goes, “Q: How do you make a small fortune in the winery business? A: Start with a large fortune.”