COFCO upgrades its imported wine division to expand the distribution channels

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COFCO has set up an independent company for imported wines, switching the focus of its imported wine business from building portfolios to developing distribution channels for mass consumption.

COFCO at Nanjing TangjiuhuiImage © COFCO

During the autumn edition of this year’s China Food and Drinks Fair (CFDF), COFCO established a new company named ‘COFCO Ming Zhuang Hui International Wines’ to replace the imported wine & spirits division formed at the beginning of 2014. The new company will take full charge of COFCO’s imported wine business.

The company has also launched a series of business models as it is planning to join hands with online and offline distributors including baijiu (Chinese spirits) companies to expand its sales channels across China.

The austerity measures introduced by the Chinese government in 2012 hit the imported wine market in China, but it is widely believed that the market is changing to a healthier environment driven by mass consumption.

COFCO released five different business management model based on the characteristics of various sales channels, including 1000 ‘E+Ming Zhuang Hui’ model for flagship stores; 500 Best Distributor Programme that gathering the top three distributors in the sales network for high-end products in each city; 200 Fine Wine Merchants model that providing authentic fine wines to a group of selective merchants who have well-established sales channels; 100 Brand Partnership model that helping the company to work with key opinion leaders in other industry, and Entire Network Integrated Marketing model which will promote the company’s wine brands on famous online shopping platforms.

‘We didn’t just make up these five models – they are summarised from established cases and will be spread across the country,’ said LI Shiyi, general manager of COFCO's imported wines & spirits division.

As one of its moves to shift the business focus, COFCO Ming Zhuang Hui International Wines signed a deal with Jingzhi, a leading baijiu company in Shandong Province which has abundant resources of distribution channels.

According to the information provided by the group, COFCO started its imported wine business back in 2008, and its portfolio has covered 36 winemaking regions in 12 countries. It has purchased wine estates such as Chliean winery Vina Bisquertt and Chateau Viaud in Bordeaux, and has signed cooperative agreements with Chateau Kirwan and Moueix Family in France, Concha y Toro in Chile, Greek wine produer Boutari and McGuigan Wines of Australian Vintage Ltd.

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