Australian wine group, BRL Hardy, has signed a distribution deal for mainland China with the Beijing-based wine company, Dragon Seal Wines Co Ltd. The company said the deal gave Dragon Seal the rights to distribute its wines in 20 Chinese cities.

Dragon Seal and BRL Hardy expect that the Hardys wines will benefit from the expected rise in sales of quality wines resulting from lower import taxes following China's entry into the World Trade Organisation.

"Consumers will be looking for better quality wines. While there is no shortage of wine in China, most wines are either of lesser quality or over-priced," said Dragon Seal general manager, Liu Chun Mei.

With imported wines currently representing only around 500,000 cases out of a total market of 11.5m cases and per capita consumption still relatively low, BRL Hardy believes China offers the company excellent long term development potential. "We think China has long-term potential," said BRL Hardy managing director, Stephen Millar. "Wine consumption per head is very low."

However, Millar stressed that the Chinese market for imported wines represented long-term development potential for the company. "This isn't going to change the state of the nation but we think it is worthwhile. We think we can move some cases," he said. "We don't have massive expectations. We will begin sending a few containers to start with and how quickly they are reordered will depend on their success in the market place."