Sileni secures deal with major Chinese chain

Sileni Estate's Sir Graeme Avery has wrapped up four years of negotiations with a major China market deal.

Hawke's Bay's links with the growing Chinese wine market have grown stronger with a new deal forged between Sileni Estates and one of China's leading retail chains.

After several years of negotiations, Sileni Estates CEO and president Sir Graeme Avery announced the company had signed up a business relationship with China Vanguard (CRC) which would give it nationwide distribution across what was now one of the world's top five wine-consuming countries.

The Sileni range will be distributed through top-end supermarket chains Ole' and blt which are CRC's flagship retail groups and among the largest retail chain enterprises in China.

Sir Graeme said the deal was the result of four years of negotiations he steered with CRC.

"We have had a presence in China since early 2007, but the launch of Sileni into Ole' and blt stores is particularly exciting for us," he said.

"These high-end supermarkets focus on stocking the best international products, including fresh produce, dry goods and wine and their retail experience is one of the best I've seen anywhere in the world."

China Resources Vanguard currently has a total of 50 Ole' and blt stores across China which sell more than 70 per cent imported products.

Sir Graeme was delighted to have concluded the deal, as was the chief of Ole' Wine Cellars Leo Su.

"We are very grateful to work directly with Sileni Estates, the famous New Zealand winery with a great reputation," said Mr Su.

"We thank the Sileni team for their support and look forward to seeing Sileni wines grow in popularity in Ole' and blt."

To help facilitate the nationwide launch of Sileni wines, a China-based brand ambassador had been appointed.

"There is a lot of potential in the Chinese market, which is why we continue to invest in growing our brand there," Sir Graeme said.

"But it is a market that requires patience and per capita wine consumption is still low, so we anticipate growth will be slow," he added.

Wine is seen as a status symbol among the emerging middle class in China, with growth driven by young people and middle-class consumers enjoying higher incomes.

Hawke's Bay's reputation for producing excellent red wines was well in the region's favour as reds make up an estimated 63 per cent of the Chinese sales market.

After a slight dip in 2013, total wine sales were now on the increase, and in 2014 the volume sold was 2395 million litres.

Beijing-based wine educator and Master of Wine judge Fongyee Walker, who represents the Hawke's Bay Winegrowers association in China, said Hawke's Bay had built a strong reputation as a creator of high-quality wines.

She said the region had a "stunning" diversity of wines and the near-perfect 2013 and 2014 vintages were finding favour in a market which was seeking world-class wines.

Hawke's Bay Winegrowers executive officer James Medina said distribution was always a challenge as the industry was still relatively young and the country was vast.

-China Resources Vanguard is a state holding group which is directly under central government and one of the largest retail groups in China. It owns Vanguard, SG, Fun2, Chinese Arts & Crafts, CR Care, Ole', blt, Vivo and Pacific Coffee. Their supermarket retail business is number one in China. China Resources Vanguard operates in 31 provinces, including municipalities and special administrative regions, and more than 100 key cities.