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China takes WA's drop to invest in the wine industry future

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A new report released by the Bankwest Curtin Economics Centre at Curtin University outlines major considerations for wine producers when exporting Western Australian wines to China.

The report, titled WA Wine Exports: Building an economic future with China, was completed in consultation with six key industry stakeholders and 26 wine producers across all WA wine regions to gain insight into expert issues and the Chinese market.

Lead researcher, Associate Professor Jeremy Galbreath, said the report identified five key themes: the growing market for Australian wines in China; distribution; packaging and product development; marketing and branding; and a business model innovation.

"There is a perception that WA's wine production volume is too small to make any significant penetration into the Chinese market," Associate Professor Galbreath said.

"Our research, however, determined that there was a definitive market for premium wine in China and that WA was well poised to meet a slice of that demand, providing wine producers consider a few key aspects when exporting their wine.

"Successful exporters must be creative around labels, colouring and wine descriptors, while investigating the value of creating new wine brands specific to the Chinese market.

"Producers should also be aware of the language differences and how terminology is understood when using descriptors of their wine on labels. This will ensure Chinese consumers understand the messages in the same way."

The importance of precise marketing and branding of Western Australian wines was also highlighted as the impact of WA's isolation presented additional challenges.

"Outside of some knowledgeable wine consumers, even regions like Margaret River have little global recognition. This needs to change in order for Western Australian wine producers to successfully increase exports to China," Associate Professor Galbreath said.

“Several participants in the research expressed that regional producers should investigate more thoroughly how they can collaborate or cooperate to increase the volume of their exports to China,” Associate Professor Galbreath said.

“This would help overcome some concerns about too many small producers acting alone, encouraging participation towards a common goal, and keeping individual brands intact.”

“The reality is that the majority of wine producers in WA are unprofitable and new business models are needed to restore profitability and to secure a sustainable future,” Associate Professor Galbreath said.

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