China has already developed a taste for French wine and Scotch whisky. Now, Mexico is asking the Middle Kingdom to give tequila a shot.
During his June visit to Mexico, Chinese President Xi Jinping signed a trade deal that lifted restrictions on imports of Mexico’s finest, 100 percent blue agave tequila. Along with efforts to boost Mexican pork shipments, the agreement strives to narrow a yawning trade gap that favors China 10 to 1 and represents the worst trade imbalance in Latin America.
If all goes according to plan, distillers will be the big winners, and some already have boots on the ground.
“We’re thinking tequila can easily become one of the biggest and most expensive imports into China, in spirits,” said William Jarod Webb, Asia field support director for Dos Lunas Spirits, LLC.
Webb boarded a plane to China two weeks before President Jinping arrived in Mexico. The game plan, he said, is to be the first horse out of the gate, and to replicate the success of fine cognac – China’s No. 1 imported liquor and a favorite among China’s well-healed and emergent professionals.
Mexico’s national tequila industry chamber forecasts exports to China will catch fire, hitting 2.6 million gallons of superior quality tequila in five years. That would make China its second largest market for 100 percent agave tequila after the United States, which imports about 13.7 million gallons a year.
The chamber plans to familiarize Chinese consumers with “sangritas” and “margaritas” through tastings later this year, and by placing bottles in prestigious clubs and restaurants.
Distillers also will have to contend with the lofty import taxes China slaps on luxury items. Webb, at Dos Lunas, estimated a bottle of the company’s reposado tequila, aged in oak barrels, would cost between $80 and $100 in China, about double U.S. prices. The distiller will eventually make its grand reserve bottles available in China too. Aged over 10 years in Spanish cherry wood barrels, its grand reserve tequila sells for $2,500 a bottle in the United States.
“What we have to do for these (export) figures to become a reality is work very hard in the market,” he said, “because 1.3 billion consumers have to get to know the drink. They have to see it… they have to try it.”
Source: Latin Trade
