Selling wine in CHINA

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1 China is now the 5th largest consumer of wine by volume, which imports a wide variety of wine from old and new world countries like France, Italy, the US, Australia, Chile, etc.

2 BUT only 3 per cent of the wine imported in China is ITALIAN, while 54 per cent is FRENCH. Italia Francia Question is: WHY the french wines are having a selling market which is 20 TIMES bigger then the italian? 10 0 vendite Cina

3 If you ask to an italian producer of wine about his SUPPLY CHAIN, most of the times you get this answer: we sell EX WORKS, the transport problems belongs to the buyer. We don t want to get involved and intake any risk This is what most italian exporters say, whatever is the product they sell. ITALIAN exporters (in the majority) sell EX WORKS

4 Mostly ITALIAN companies act as follows: sell EX WORKS don t care about the SUPPLY CHAIN don t KNOW the END USERS

5 And the OTHERS? Americans and French are keeping control of their products until is deliverered to the FINAL CONSUMER/END USER They keep control of the STORAGE at Hong Kong They guarantee the CONDITION during the vojage They coordinate the LOGISTIC and the DISTRIBUTION

6 Acting in this way they are WINNING IN THE GLOBAL MARKET

7 ITALIANS producer says: We are SMALL, we have no LOGISTIC department, we have no FORWARDING office, we CANNOT get involved with the extra work involved with the TRANSPORT

8 BUT neither American and French have any LOGISTIC or FORWARDING internal structure

9 They ENTRUST a FORWARDER to take care of the whole activity, transport, custom, logistic, distribution Somebody with own warehouse in Italy and own/controlled warehouse in Hong Kong, for example Somebody able to create a STOCK of cargo in HONG KONG for immediate delivery when an order is placed

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13 That s the SIMPLE difference (1) AMERICANS and FRENCH sell DAP (delivery at place) (2) ITALIANS sell EX WORKS Choosing the option ONE, they sell 20 times more then who is choosing the option TWO

14 Finally to ENHANCE the importance of HONG KONG we must say that importing WINE in HONG KONG is FREE of DUTY DUTY is involved when entering MAINLAND CHINA (and it s 48,32 % of the CIF VALUE). But STOCKING the cargo in HONG KONG can be great as you have NOT to pay the DUTY until you finally sell the WINE to China (and if you sell to a client in HONG KONG the DUTY will be NOT to be paid)

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18 Thanks indeed for your attention Paolo Federici