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Australia’s Japan wine boom: winning the locals over

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Japan’s cultured consumers have switched on to Australian wine, with the recent trade deal helping produce record exports in the year to March. Yet for Australia’s wine industry, winning the brand battle against established European competitors will be a longer-term struggle, helped by some local allies.

In May, the Australian Embassy in Tokyo hosted an event helping launch Tokyo-based Winetree’s premium Australian wines such as Sirromet Wines, with the star of the show none other than Japan’s ‘Iron Chef French,’ Hiroyuki Sakai.

Known as the ‘King of Iron Chefs,’ Sakai has gained national acclaim in a country which prides itself on its food culture, having more Michelin-starred restaurants than anywhere on the planet. However, Sakai’s year and a half spent learning his trade in Australia before rising up the chef ranks in Japan has made him a strong ally of the Australian industry.

“Sakai-san is known for his refined tastes and we’re confident he will help put premium Australian wines on the map in Japan,” said Ko Nagata, managing director of Winetree’s parent company, Global Sky Group.

“With a sophisticated and expanding customer base, Japan offers an enormous opportunity for Australian wine makers, which thanks to JAEPA [Japan-Australia Economic Partnership Agreement] can now compete on a level playing field with other New World suppliers.”

Implemented on January 15, JAEPA has eliminated Japanese tariffs on Australian bulk wine, while the 15 per cent tariff on bottled and sparkling wine will be phased out over seven years, helping improve the cost competitiveness of Australian wine in Asia’s second-biggest wine market, currently Australia’s sixth-largest by value and volume.

“Global Sky acquired Winetree in late 2014 in anticipation of the successful conclusion of Japan-Australia trade talks. We’re now focusing on promoting Sirromet and other James Halliday five-star rated Australian wines in Japan, with the aim of expanding the premium market in the world’s third-biggest economy,” Nagata said.

“Winetree also is supporting Japanese entrepreneurs and investors to invest in Australian and New Zealand wineries and vineyards, in collaboration with Austrade and New Zealand Trade & Enterprise,” he added.

Following JAEPA’s signing in July 2014, Australia’s wine exports to Japan surged by 20 per cent to a record 11 million litres in the year to March 2015, worth $43 million, “an indication that Australian wine companies are starting to reap the benefits of JAEPA,” Wine Australia said.

Reflecting the new zero per cent tariff, the strongest growth came in bulk wine exports, which surged by 414 per cent in the first three months of 2015 compared to the same period a year earlier. However, there was also solid growth in bottled exports, with volumes rising by 11 per cent and growth in all price points, such as a 19 per cent increase in wine priced over $10 per litre.

While currently ranked below top-ranked France, Chile, Italy, the United States and Spain, Australia’s wine industry now has the opportunity through JAEPA to win market share in Japan.

According to Wine Australia’s regional manager Asia, Hiro Tejima, the focus of its marketing activities including the annual Wine Australia tasting, recruitment of Australian Wine Ambassadors, seminars and other promotions is on building Australia’s image as a premium wine producer.

“The benefit of JAEPA is not just tariff cuts. It’s been a trigger for both the Japanese and Australian industry to take a fresh look at the Japanese market for Australian wine,” he said, noting an increase in the number of inquiries from both Australian and Japanese wine companies following  the trade deal.

“The question is whether we want to become a volume-driven wine country like Chile, or do we want to gain greater respect and higher expectations as a premium wine country, and the direction we are taking is certainly the latter,” he said.

Tejima said Wine Australia’s recruitment of 37 Australian wine specialists in Japan was helping to deepen knowledge of Australia’s diverse offering, helped by changing tastes among emerging wine connoisseurs.

“The Japanese wine industry is going through a generational change. Those sommeliers working in Tokyo and Osaka aged in their 20s and 30s, have a different style…they are curious about not just European but also New World wines. With these people as targets, I’m confident we can change the landscape of the Japanese wine market to benefit Australian wine makers,” he said.

Tejima said Australian wine makers could succeed in Japan by developing stronger personal relationships, showing their “personality, passion and philosophy.”

With allies like an Iron Chef though, Australia’s wine industry has the perfect opportunity to win hearts and minds in the world’s top culinary destination.

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