China:
Thanks to a new trade deal, China could up its tequila intake by 2400% in five
years
Source:
Quartz
By
Roberto A. Ferdman
June
19, 2013
Chinese
consumers love luxury products, but they drink crummy tequila. At least until
now. Earlier this month, China's President Xi Jinping and his Mexican
counterpart Enrique Peña Nieto signed a bilateral trade agreement that will
allow Mexican imports of 100% agave tequilas (Spanish link) into China for the
first time since 2008.
China
banned high-end tequilas in 2008 because of the relatively high methanol levels
found in tequila made with 100% agave (methanol is a small byproduct of the
agave distillation process). It was part of a bigger legislative move to
address the rising incidence of methanol poisonings in the country, many of
which had been caused by the consumption of fake alcohols, often made with
toxic amounts of methanol. The country has, however, continued to let in
lower-end tequilas, or tequila mixtos, which only contain 51% agave, and
therefore less methanol.
The
influx of high-end tequilas into China could be a big win for the Mexican
tequila industry, which has failed to penetrate the Chinese market partly
because its consumers aren't aware of the product. At the moment, China imports
less tequila than any other major spirit. "Most people don't even know
what tequila is, and that's a big problem," Patricio de la Fuente Saez,
managing director of Hong Kong-based wine importer Links Concept, told Quartz.
Chinese consumers tend to go for luxury goods that boast global prestige,
director of corporate communications at Patron Greg Cohen told Quartz. They
appreciate "quality" and "sophistication," he says.
With a
little consumer education, Chinese drinkers could become prime targets for the
beverage. According to Patron's Cohen, Chinese tourists are already plucking high-end
tequila from duty free shelves abroad. "Our duty free partners have told
us that Chinese tourists are a huge part of our consumers." Chinese
drinkers are also fans of hard liquor, which makes up 60% of the country's
alcohol consumption. Ninety-five percent of that hard alcohol intake is baijiu,
a locally distilled white spirit that, like tequila, is consumed in a shot.
Despite
the long-held ban on high-end tequilas, low-end tequila exports to China have grown
more than four-fold since 2008. And there's more room to grow. The country
still only imports a modest 400,000 liters of tequila a year, but the president
of Mexico's national tequila industry chamber Francisco Soltero believes they
will grow to 10 million liters in five years, assuming China's wealthy latch on
to 100% agave.
In that
scenario, China would go from being the world's 23rd largest tequila importer
to its second largest in five years. And tequila would supplant whisky and
cognac (brandy) as China's hard alcohol of choice.
Even
then, China would rank far below the world's biggest tequila guzzler: the US.
Americans bought $625 million in Mexican tequila last year, nearly 400 times as
much as China. Even quintupling China's tequila imports would only amount to a
fraction of all those American tequila shots.
No comments:
Post a Comment