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REGION: China beckons area wines

Taxes and tariffs dropped; delegation bound for Hong Kong

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buy this photo Temecula Wine Country is excited over an opportunity in China, which is dropping taxes and excise fees on imported wine from California. Bill Wilson of Wilson Creek Winery and Vineyards is president of the Temecula Valley Winegrowers Association and will be going on a trip to China. (Photo by Don Boomer - Staff Photographer)

WINE COUNTRY -- Growers here say their wines will exceed expectations anywhere in the world, all they want is a chance to get them in the market.

A giant one just beckoned.

China says it will drop all taxes and tariffs on California wines, and the nation of a billion people has invited a delegation of grape growers from the Temecula Valley to visit China. Third District Supervisor Jeff Stone will lead the trip in November.

"This is huge," said Tom Freeman, the county commissioner of foreign trade, which is part of the county's Agency for Economic and Facility Development. Freeman said existing Chinese fees and tariffs can be as high as 100 percent.

That has been punishing for growers trying to forge a sales niche in China, where the market now tends to be dominated by prestigious, higher-priced French wines, some Australian wines and inexpensive Chinese wines often sold under the "Great Wall" label.

"They really taste bad," said Chuck Spiegel, director of sales and marketing for Wilson Creek. Spiegel made the trip to China for Wilson Creek in late 2007. He said he's unsure if China lacks the climate, soils or expertise to grow and make good wine, but in any case, opportunity would seem to await Wine Country growers.

"It's a tremendous opportunity for our wine growers," said Stone, noting that wine sales in China already total $2.4 billion.

Also making the trans-Pacific journey will be Bill Wilson, president of the Temecula Valley Winegrowers Association, which claims about 30 growers and 25 wineries who are members. Just how big the local wine business is remains unclear -- the association hasn't yet conducted an accurate tally of its members output.

Wilson says he will be making the trip with some hesitation.

In 2007, his family-owned Wilson Creek Winery entered into a deal with a Chinese businessman to export Wilson Creek wines to China and about $15,000 worth was shipped over.

Not a cent has come back across the ocean.

"Where the wine was sold and where the money went, we don't know," Wilson said. And the middleman? "He's nowhere to be found."

But Wilson says he is "willing to take another run" at the Chinese market. Securing a niche in Hong Kong, with its more international orientation and better developed middle class, is a good entrance strategy for the rest of the nation, he reckons.

One key to success will be China's emerging middle class, which wants something better than a Great Wall red.

Most Wine Country varietals fall into the mid-priced range, about $10 to $30.

Winning a sales niche in China would help Wine Country distinguish itself in the national and world marketplace where "California" and "wine" often mean "Napa," "Sonoma," or one of the other better-known wine areas in the state.

Wilson Creek wines soon will be sold in Virginia, the 27th state for the label. This month, Wilson Creek arrives in its first overseas market -- Bermuda.

No matter how successful the trip is to China, Spiegel knows it will take a lot of work and relationship building to establish a real market there.

Wilson Creek earned its way into Bermuda at a "pouring," an event where dealers tasted the wines. They liked what they sipped and agreed to sell some in stores.

"But no one there had heard of Temecula Valley," he said.

Contact staff writer Jeff Rowe at 951-676-4315, ext. 2621.

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