Catching the attention of Chinese millennials by sponsoring American basketball and English soccer might not seem the obvious way to promote Australian wines in China.
But the tactic has worked for Treasury Wine Estates (TWE), the company behind Penfolds and Wolf Blass, which has become the top-ranked wine importer in China. The Manchester City-branded Wolf Blass wine label is for Chinese drinkers only.
The NBA and English Premier League are the number one and two sports watched in China, explains Peter Dixon, TWE’s managing director for North Asia.
China became Australia’s biggest wine export market in 2016. The latest data, for the year to March, shows a 51 per cent increase in sales.
The Chinese are drinking $500 million worth of Australian red wine, and premium bottles worth $20 to $50 have seen the biggest leap, up 87 per cent.
TWE’s role in paving the way was acknowledged at the AustCham Australia-China Business Awards in Beijing on Thursday night, where the company was a finalist.
Another key to success has been “getting closer than we’ve ever been” to Chinese partners including e-tailers, restaurants and distributors to make Australian wine “significantly more available”.
He says that Australia’s Free Trade Agreement with China, which reduced Australian wine tariffs to 5 per cent in January, has helped, but not in the way you would expect.
Penfolds, Rawsons Retreat and Wolf Blass don’t compete on price and are positioned as premium brands, he says.
The FTA was the “icing on the cake” because it gave government endorsement to Australian wines in the eyes of the many Chinese state-owned enterprises Treasury Estate deals with.
Mining barely rated a mention at the AustCham gathering of 450 Australian business people on the front line of trade with China on Thursday night. Instead the buzz was around wind farms, probiotics, retirement villages, health and wine.
The changing trajectory of Australia’s biggest economic relationship, propelled by a Free Trade Agreement which is cutting agricultural tariffs and giving Australian services better access to China, was visible in the success stories.
Family owned probiotics company Evolution Health saw its sales to China leap 350 per cent last year, after it worked with China-based marketing experts to target millennial mothers.
Evolution manufactures in Australia and exports to China through the large Chinese e-commerce platform T-Mall.
The George Institute, a research body linked to the University of NSW, was recognised for social responsibility. UNSW neurologist Craig Anderson is the executive director of the institute’s China office, where it conducts large preventative health studies.
Mr Anderson said its researchers were tapping into the Chinese enthusiasm for smartphone apps to create programs that help consumers make healthier eating choices.
Diabetes and cardiovascular disease were a problem in China because the health system has focused on dealing with emergencies at hospitals, instead of preventative healthcare in the community, he said.
The world’s largest wind power company, Goldwind, won best cross-border investment.
Goldwind, a Chinese company, recently bought Origin Energy’s Stockyard Hill wind farm with plans to build Australia’s largest wind farm.
Keynote speaker Shu Hua, the chief executive of GCL Systems, a Chinese solar power company, remarked that despite many countries responding positively to renewable energy since the Paris Agreement, “solar power generation capacity in Australia is not very big”.
His company, which competes with Tesla, launched its household solar battery in Australia.
“We want to encourage the entire world to afford solar technology,” he said.
The company attracted international attention for its plan to build a solar power plant within the exclusion zone of the Chernobly nuclear disaster site in Ukraine.
By Kirsty Needham
Sydney Morning Herald