Why Chinese Copiers of Australian Wine Could Explode

(Source: Getty, Twitter / PaddyFok)

White and red label; graceful cursive font; and featured as one of Australia’s oldest and best-known wine brands.

It looks like Penfold’s, but it isn’t.

‘Penfunils’, a counterfeit wine produced in Adelaide, was spotted and photographed by a Twitter user on Sunday with a tongue-in-cheek comment.

“Preview in [Chinese city] Hainan, ”wrote Beijing-based Paddy Fok. “I admit that I have never crossed these Australian labels!

Chinese companies have already been caught selling similar counterfeit wines. Another imitation wine called ‘Benfords’ was spotted on Chinese e-commerce giants Pinduoduo and JD.com in 2018, along with these fakes, the ABC reported.

A spokesperson for Treasury Wine Estates, the parent company of Penfolds, said he would investigate the fake.

“We take any violation of our Penfolds brand very seriously and continue to make significant investments in our brand protection program in all markets, including China,” the spokesperson said.

Access to Australia’s largest export market blocked

Australian wine exporters’ access to the Chinese market has been strangled since protectionist tariffs of 107-212 percent were imposed on Australian bottled wine on November 28.

As Australia’s most important trading partner by far, China is also Australia’s top wine export destination.

The recent restrictions have taken their toll. According to figures from Wine Australia, Australian exports – which reached a record high of $ 3.1 billion in the 12 months leading up to October 2020 – fell sharply in the last two months of the year, with the drop largely from exports to China.

The outlook is not more optimistic, with exports to China expected to remain weak this year. And according to Tony Battaglene, CEO of the national Australian Grape and Wine association, it is the producers and local communities at the end of the supply chain that will pay the price.

“It’s going to have a devastating impact,” he said. . “It is the wine growers, it is the regional authorities and it is the small exporters who have very little capacity to adapt. They are the ones who will suffer.

Will imitators fill the market void?

But with Australia and China’s frayed relations yet to be mended, there is no indication that tariffs will be lifted anytime soon – and fakes could fill the void in the market.

“We may see more copiers,” said Heng Wang, an expert in Chinese and international law and a professor at UNSW. Yahoo finance.

“The prices are so high that it is difficult to buy the same product at a comparable price.

Chinese consumers will always have an appetite for imported wines, he added, but many of them won’t know the difference between a fake and a real one.

“It varies. If consumers are wealthy with strong economic capacity, they are able to differentiate what is a good wine and what country.

“Other consumers just want imported wine, but don’t care where it comes from. They just think that if it’s imported, it must be of good quality.

Australian exporters forced to adapt

Overall, Wang said China’s tariffs have created a higher margin on Australian products, creating a lose-lose situation for all. “No one is really taking advantage of it.”

Wine Australia CEO Andreas Clark said companies were already looking to increase their exports to other markets, like Europe, which rose 22% to $ 704 million, its highest level in a year. decade.

“Wine companies are resilient and are already adapting to these new market conditions, increasing their engagement in markets other than China, particularly the UK, US, Canada and the domestic market,” said he declared.

But Battaglene doesn’t think it will be easy to turn to other markets quickly.

“[August to December] is our peak export period – 50 percent of our product goes to China in the last four months of the year. It’s closed. So this product has nowhere to go.

Meanwhile, prominent economist Tim Harcourt said there was a potential advantage for imitators.

“The Chinese consumer is ready to pay [a] higher price for Australian wine, ”he said Yahoo finance.

“The more imitators there are, the more it drives up the price of the real thing.”

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