Over the years, the Chinese consumers’ interest to and appreciation for wine has grown, giving opportunities to foreign exporters. Wine is not only bought as gifts or consumed by the wealthy. Many have access to good quality vintages and have shifted from drinking local alcohols like baijiu.
Selling wine in China involves a strict process. Exporters need to follow regulations set by Customs, learn the local standards and understand the exporting process. Moreover, determining the preferred taste and style of consumers serves is a big challenge for businesses.
Targeting Market Niche
China is a huge market. While there is a big demand for wine in first-tier cities like Beijing, Shanghai, Guangzhou and Shenzhen, competition among retailers is high. Meanwhile, the demand is not as big in smaller and regional cities, but competition is generally lower. This offers more untapped opportunities for businesses.
Wine taste may also vary by region. It is important to consider what the consumers want in a specific market. Recent research indicates that Chinese drinkers prefer fruity wines with lower tannin. Aromatic white wines are also showing big growth potential, while sparkling wines (the sweeter varieties) are becoming increasingly popular.
Before exporting any consumable products into China, it is necessary to study the regulations and local standards to avoid problems. The General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ) has set regulations that businesses must pass before their wine products can enter the market. They must likewise pass the Guobiao (GB) standards.
Other regulations related to exporting wine to China include the Food Safety Law of the People’s Republic of China (2015), the National People’s Congress (2015), the President Order 22 (2015) for advertisement, the SAIC: Measure for Administration of Special Signs of Geographical indication products and the Trademark Law of China.
The Exporting Process
Businesses planning to sell wine in the Chinese market must follow the necessary steps. First, they need to find and sign an agreement with a local importer who will handle product registrations with the State Certification and Accreditation Administration (CAA) and the AQSIQ. Before the wine shipment, they must also register the label and send a number of documents to the China Inspection and Quarantine (CIQ) for review.
Once the goods arrive in China, the local importer must declare them at the nearest CIQ office. A certificate of approval will be released once the shipment is deemed to follow local standards. Imported wines must also undergo product testing to analyze levels of metals and mineral, as well as vitamins.
Import Taxes and Tariffs
China’s General Administration of Customs administers tariffs on most imports, which cover packing charges, freight, insurance premiums and other service charges incurred prior to the unloading of the goods at the place of destination.
For wine imports, there are three different taxes – value added tax VAT (17%), customs duty (14%) and excise tax (10%). Those countries that have Free Trade Agreements with China no longer need to pay customs duty in the future. Import tariffs for Australian wines, for instance, have been reduced to zero starting January of this year
China’s wine market has shown remarkable grown in the past years and is expected to continue to do so in the future. While businesses planning to enter this market have a number of considerations to make and regulations to follow, doing so will only give them competitive advantages and prevent serious setbacks in the long run.