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Portuguese wines ‘need to crack’ China

Despite good sales in many Asian countries, Portuguese wines have yet to make a big mark on China, however this looks set to change, according to the export director of the Bacalhôa group, António Mendonça.

The historic winery of Quinta do Carmo in Alentejo which dates back to 1890

Speaking to the drinks business, António Mendonça, the export director of the Bacalhôa group of wineries, said that business was booming in Japan, Hong Kong, Singapore and unsurprisingly, Macau but “more work” needed to be done in terms of conquering China.

“Elsewhere in Asia – Japan, Singapore, Macau, Hong Kong and even the Philippines, our wines are doing well and we have demands for all segments of our wine, the lower end, medium and premium,” he said.

“But China is a challenge, we were not successful in selling our premium wines in the first tier cities of Shanghai and Beijing as there was too much competition with Burgundy and Bordeaux who have had a presence there for years.

“We also could not compete with China’s domestic wines with our lower-tier brands but we’ve changed our strategy by focusing our medium priced wines on second tier cities. Since we did that a couple of years ago, we’ve become more successful and grown our sales.”

Bacalhôa Wines of Portugal, founded in 1922, is now one of the leading wine producers in the country with a portfolio of wineries in all the main wine producing regions: the Douro, Dão, Bairrada, Península de Setúbal, Lisboa and Alentejo. The historic winery of Quinta do Carmo in Alentejo which was previously owned by Lafite Rothshild is Bacalhôa’s bestselling wine.

Bacalhôa mainly exports to the former Portuguese colonies of Brazil, Angola and Macau but the group has recently turned its attention back to Asia and built on the success of its premium wine sales in Hong Kong and Macau.

In China particularly, it was a strategy initially focused on selling its mid-priced wine to the off-trade and Bacalhôa signed on with a retail partner in Fujian Province to bolster sales.

“In China we needed to stay somewhere in the middle in terms of price and place,” continued Mendonça, “which was complicated because until very recently there were no traditions of regular wine consumption like there is in Europe. We saw spikes in sales around the Mid-Autumn festival and Chinese New Year but people – especially away from the hubs of Shanghai and Beijing – were not going out drinking. They bought mainly from supermarkets for having at home.

Another trend Mendonça has noticed is the long-standing habit of Chinese businesses buying Bacalhôa’s medium priced red wine such as JP Azeitao, Quinta de Bacalhoa and Quinta do Carmo in bulk as gifts for employees or clients.

However, it’s the sales of Bacalhôa’s sparkling and sweet rosé in Shanghai where traditionally hardly any whites do well which has got Mendonça excited.

“This tells me we are starting to see a more curious market. What strikes me every time is people’s enthusiasm in China to try new things. Gradually we are seeing more consumers going out for dinner and drinking wine without spending a fortune and our Portuguese wines are on course to meet this new demand.

“We have so much quality and unique grape varieties that an ambitious market like China will love exploring them.”

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