July 16, 2007
just-drinks.com editor's weekly highlights
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If Danone’s woes with its Chinese joint venture partner Wahaha aren’t enough to highlight the problems of doing business in the emerging markets - there was a further twist to this sorry saga last week - then two further stories underlined the issue in the last few days.
Both reports centre on the problem of counterfeiting. The Diageo-owned brewer Guinness has been the victim of an adulteration scam in Nigeria, with reports suggesting that an entire fake brewery had been set up outside the city of Abuja.
Meanwhile, figures came out of Beijing mid-week that claimed nearly half of the water coolers across the Chinese capital have allegedly been filled with bogus water.
As we argued in our blog this week, whilst the Chinese economy continues to boom, the gloss that once surrounded ‘Brand China’ is beginning to wane. Legal battles such as the one Danone finds itself embroiled in, do little to foster an image as an investment-led environment. Meanwhile, the health scare that has followed the story of the water coolers is not an isolated incident and has the potential to completely undermine China’s position as a manufacturer of reliable goods and consequently its status on the export markets.
The Chinese authorities seem to be waking up to this threat and are taking drastic action - a high-ranking government official who approved fake medicines and took bribes was recently executed.
The problem has, I suspect, a lot to do with China's hectic rate of economic growth and the lack of a domestic consumer rights culture, combined with little in the way of institutionalised quality control. Japan and South Korea went through similar growing pains decades ago, so the situation is very solvable.
But it's still something that the Chinese authorities really need to get a grip on - and fast.
Until next time...
Olly Wehring, Managing Editor
In January, just-drinks sent out questionnaires to 40 players from the UK wine market that it had identified as being the leading decision-makers, thought-leaders and purse-string holders. The purpose of the ten questions we put to our respondents was to measure the health of the UK wine market from the perspective of those people working within it every day. June’s briefing presents the results. Find answers to questions such as ‘What is the most important issue facing the UK wine market in 2007?’ and ‘What major consumer trends do you see coming in the months ahead?’
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