Connoisseur aims to develop China's taste for fine wine
ROBERT BEYNAT IS delighted to be bringing Vinexpo back to Hong Kong and still more so to have the full backing of his exhibitors in returning to the venue where the French trade show operator staged its first overseas exhibition in 1998.
There isn't much doubt in the minds of the wine and spirits industry professionals attending Vinexpo Asia-Pacific at the Hong Kong Convention and Exhibition Centre next month that a good part of their future lies in China.
Exhibitors at Vinexpo's last overseas event, in Tokyo 18 months ago, were asked where they wanted the next one to take place and they voted for Hong Kong.
According to Mr Beynat, Vinexpo Asia-Pacific's chief executive, the industry still considers Hong Kong the best gateway to the Chinese market and neither Beijing nor Shanghai was ever considered.
'They are fascinated by the Chinese market. The financial crisis has ended. They trust in the size and the development of the economy but they trust also in the culture of the Chinese. They have drinking alcohol in their culture. There is a tradition. The only question is when it will be a real market,' he said.
It is a multibillion-dollar question and one that preoccupies him a good deal. Consumption of imported wines and spirits is increasing in China and wine is a particularly important growth category.
According to a report commissioned by Vinexpo from the International Wine and Spirit Record, by 2009, consumption of wine in China should have risen by 78 per cent to 5.74 million hectolitres or 766.26 million bottles.
Total wine sales in China in 2004 were worth about US$1.13 billion. Most of that wine - about 94.8 per cent - was domestically produced. But with volumes rising overall, Mr Beynat points out that consumption of imported still wine is growing more quickly than the market, by an average of 15 per cent to 16 per cent annually.
Total imported still wine sales are projected to be up 158.7 per cent over a 10-year period to 313,000 hectolitres or 41.73 million bottles per annum worth US$1.76 billion by 2009.
Mr Beynat believes that the increasing popularity of domestically produced wines and their generally improving quality can only be good for the market overall.
'It's the same all over the world. The more a country produces wine, the more they will drink. The more they drink, the more they will import. Take the United States. The best-selling wines in the US over 50 years are the American wines. The French, the Italians and the others sell more wines in the US because the Americans produce wines. It will be the same in China,' he said.
France in general and Bordeaux in particular - Vinexpo was originally established mostly to promote the region's wines and they will be strongly represented at the show - stand to do particularly well out of the market growth.
France is still the leading supplier of imported wine to China with 71,000 hectolitres shipped in 2004. It is some distance ahead of Australia and Chile, although both are chasing hard. The International Wine and Spirit Record projects that France will retain this leadership position, exporting 94,000 hectolitres of still wine to China a year by 2010.
Although the obsession with Bordeaux among China's new wine drinkers is expected eventually to give way to broader tastes, the region's best wines will retain a special cachet and value, Mr Beynat said.
'I live in Bordeaux and I'm Bordelais,' he said. 'We have the first wine of the world and we open the doors everywhere. We opened the doors 50 years ago in the US, 20 years ago in Japan and this time in China. We have expensive products but they're not a problem to sell.'
A pride in his Bordelais heritage is one of the reasons Mr Beynat derives such profound satisfaction from his job. He insists that the region still leads the world in producing high quality wines.
'Bordeaux is the largest area of production of appellation controlee wines in the world - seven million hectolitres. The whole of Australia produces only double what Bordeaux does,' he said.
That volume of production is becoming a problem in itself.
France has a wine glut and this year will convert 200 million litres of wine into industrial alcohol. There is nothing new in that process but this time a proportion of that wasted wine will be good quality Bordeaux along with the usual inferior quality production.
His mission, as he sees it is to enlarge international markets so that good wines are drunk rather than distilled but he acknowledges that it is an uphill struggle.
'When you have a national market decreasing it's difficult to change your strategy from selling to France to selling to the world. Like Italy, France is selling 70 per cent of its production nationally but consumption in France is decreasing so you have to find new markets. It's one of the reasons for the difficulties of Bordeaux. The average wines used to be expensive because there was a big demand. Now it is difficult to say to the vintners you have to lower your price and you should be more open,' he said.
Other factors have further complicated his task but his regional pride remains intact.
'The US dollar has been not so strong in the last years, there have been political events around the world and before that the financial crisis in Japan but I trust in the future of Bordeaux wines,' he said.
Bordeaux chateaux are not the only French wine producers that know they need the emerging Asian markets. Exacerbating the problem of diminishing domestic consumption in France is stronger international competition emerging in traditional markets such as Britain where Australia is now the leading international supplier.
Australia, Chile and the US are also potent forces in Asia Pacific.
'The percentage of sales of France in the Asian markets is decreasing in relation to competitors but as the market is increasing, the volumes sold by France are bigger year after year,' Mr Beynat said.
He pointed out that French investment and expertise have contributed massively to the development of China's wine production industry and hence wine market, since Remy-Cointreau established one of the first joint-venture wineries at Tianjin in 1980.
'It's not only French wine makers in China. We have more and more Chinese students at the Bordeaux Institute of Oenology. We are educating Chinese wine makers and I know at least three Chinese people working for Bordeaux chateaux,' Mr Beynat said.
The potential for wine imports to China may look good but he is the first to point out that the market is still a problematic one.
Consumption remains concentrated in the major cities among the young and affluent, although wine has become a part of the banqueting culture nationally. Other challenges include the lack of effective national distribution and forgery of wine labels.
'The limitation today is better distribution. That's the challenge. If the consumer can't find the wine in the shops or the wine is too expensive on the wine list in the restaurant, the consumption will not increase. The challenge is to help and to invest in better distribution of the wine in China,' he said.
This is a subject, he says, which many of the participants in Vinexpo Asia-Pacific will be keen to get up to speed on during the event's 'university' programme of seminars, tastings and discussions.
'The focus will be on the construction of the distribution network in China. Nobody knows how it will work. Probably, the best specialists are the importers in Hong Kong,' Mr Beynat said.
The relative lack of sophistication of the Chinese market at this stage presents other difficulties. Good wines often suffer from poor storage and can be disappointing when opened.
Worse yet is the practice of faking labels of expensive wines, usually from Bordeaux chateaux, or of simply refilling genuine bottles with inferior wine and recorking them. Both problems have the potential to slow the market's growth.
'There are many efforts by the French government and Bordeaux people to fight against that,' he said. 'It's a pity to see copies because they give a bad impression to consumers. Thank God it's not as bad as the fashion and leather goods sectors. You can copy the label but the wine is more difficult.'
Vinexpo Asia Pacific takes place at the Hong Kong Convention and Exhibition Centre from May 23 to 25. Admission is for trade only.
Robert Beynat was born in Casablanca in 1948 but his family hailed from Bordeaux.
Mr Beynat studied economics at the University of Bordeaux and then went into a financial manager's position at a garment manufacturing company.
In 1975, he joined the Bordeaux Chamber of Commerce.
In 1980, he found his true calling as co-founder and chief executive of Vinexpo which went on to become a biennial event and the most important wine and spirits trade show in the world.
Mr Beynat, who is married with one son, travels the world promoting Vinexpo's exhibitions but continues to live in Bordeaux.