Flametree Wines gets a good taste of China

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Flametree Wines may be considered a young and small winery, but having won the prestigious Jimmy Watson Memorial Trophy, and a sterling write-up by famed Australian wine writer James Halliday, all backed by a strong sales track record, the winery is now up there with the big players in the industry.

Sitting on picturesque Geographe Bay in the Margaret River region of Western Australia, family-owned Flametree Wines was established in 2007. With highly acclaimed winemaker Cliff Royle on board and five full-time staff, the winery produces 20,000 cases of wine each year, including Chardonnay, Cabernet Sauvignon and highly rated Sauvignon Blanc Semillon blends, a growing proportion of which are now heading overseas.

“About 10 per cent of what we produce is now exported,” said Liz Mencel, Export Sales and Marketing Manager, Flametree Wines.

“We’re aiming to make that about 30 per cent in a few years.”

Flametree has been exporting its wine for the past six years, with major markets including China, Canada, the UK, Hong Kong and Singapore.

“In the last year we have made a concerted effort to boost our export sales through more appropriately targeted sales efforts and increased travel to build on important relationships,” said Ms Mencel.

Despite being its least established and streamlined market in terms of distribution, China is now Flametree’s largest export destination, following on from the launch of the China-Australia Free Trade Agreement (ChAFTA) in December 2015.

“We have had a mix of opportunities in China. Some of our largest clients are gifting buyers in China. Gifting is a very legitimate market for wines in China, especially for high-end red wine, with three main holiday periods throughout the year when corporate customers buy gifts. Yet two of our most promising customers have just come up in the last year,” Ms Mencel said.

“There’s no doubt in my mind that the FTA played a role in that. One is a large online retailer and the other has 1,000 retail outlets across 300 cities in China, which is really significant.”

Ms Mencel said the Chinese market is attracted to the generosity of fruit in Flametree’s red wines and the longevity of its wine.

“They are beautifully structured wines, which they like and they’ve also commented really favourably on our packaging. The red colour scheme suits the Chinese market too.”

As a new wine market, Ms Mencel said the Chinese have previously looked to traditional producers like France for their wine. But with the introduction of ChAFTA – which brought wine tariffs down from 14 per cent to 8.4 per cent and will continue to reduce them until they reach 0 per cent on 1 January 2019 – Ms Mencel said they are seeing a change.

“China is being a lot more receptive to good-quality Australian wines because the pricing barriers are being removed. Whereas before we might have been priced alongside a French equivalent wine, we’re now a lot more competitive and they’re willing to say ‘let’s try this’.”

With ChAFTA in place and the duties falling, Ms Mencel said Australian wines are becoming more attractive.

“There is a lot more awareness and an openness to looking at Australian wine with the Chinese now considering it above others. When you combine that with the favourable exchange rate, it is becoming even more competitive.”

Ms Mencel said ChAFTA is opening doors for business, which is having a head-turning effect.

“I have noticed an increase in the amount of enquiries that are coming in and potential customers are being a lot more receptive and moving ahead much more quickly than previous years,” Ms Mencel said.

“A delegation may come out to look at wines in the region, they decide who they want to work with and they’ve got a container on the water in a month’s time. They are working very quickly and efficiently.”

Having attended a joint industry visit to China last year, Ms Mencel said to boost export sales, Flametree has set aside budget to travel back to the market. The winery hopes to meet with a number of potential distributors as well as build relationships with customers to whom it has sent trial orders.

“Through Wine Australia and industry contacts, we have hosted a lot of incoming tours of Chinese visitors at the winery,” Ms Mencel said. “We also won a DHL scholarship, which gives us free freight and allows us to take part in Export Growth China. This gives us access to a showroom in Shanghai and representation at major trade shows, which is amazing.”

In the longer term, Ms Mencel said China’s burgeoning middle class and thirst for good-quality wines mean the country will continue to be Flametree’s main focus.

“Over time as the tariffs continue to reduce, ChAFTA will open up more and more doors and opportunities for us,” she said. “As we become increasingly price-competitive, we will attract even more visibility on the world stage, which is very exciting for our business.”

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