CHINA: Reh Kendermann warns of anti-gifting sales drop
The B range has helped revive Black Tower sales
German winery Reh Kendermann is bracing for a 20% drop in sales to China for its Black Tower brand because of anti-gifting measures in the country, the company's MD has told just-drinks.
The measures, introduced late last year, have already hit the performance of foreign spirits makers in China such as Pernod Ricard and Diageo. They includes a clampdown on gifting to civil servants and a ban on alcohol at banquets.
So far it has been unclear how the measures will affect wine. However, yesterday (10 September) Nik Schritz, Reh Kendermann's MD, said his China importer has warned sales of the German wine range could be down by one fifth by March. The period includes the the Mid-Autumn Festival, which starts on 19 September, and Lunar New Year, both important gifting and banqueting occasions.
However, Schritz, who visited Shanghai and Xiamen last week, said that because the measures are aimed at high-priced alcohol, they could benefit companies from smaller wine producing countries. “There could be opportunities for lower-priced brands if wines from France, for example, are thought to be too expensive,” he said. “In three to four weeks, we will know more.”
Black Tower entered the China market four years ago and sells between 600,000-720,000 bottles cases a year.
In a presentation to journalists in London yesterday, executives from Reh Kendermann said China is a main focus for the export-led Black Tower, alongside the UK and the US.
Alex Rittlinger, the group's marketing manager, said the brand is on track to return to its 1980s peak of 18m bottles a year, selling 14m in the past 12 months. A redesign launched three years ago and new products such as the light sparkling rosé Pink Bubbly and B range, a 5.5% abv series of lower-calorie wine targeted at young women, has helped revive the brand from a low of 4.8m bottles in the 1990s, Rittlinger said.
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