China importer broke up with an Italian winery for ＂disloyalty ＂

 

Write | WBO Team

Translate and Edit | WBO Kiwi

 

Recently, an Italian wine brand named “Feudi del Pisciotto Nero d’Avola I.G.T”, whose label looks similar to the luxury brand Versace, has irritated the Chinese importer and their cooperation has come to an end because of the “disloyalty“” in cooperation relationship.

The importer “Interprocom” claimed to terminate the cooperation

 

A few days ago, an importer Interprocom Cantine Divine sent an announcement to its distributors, saying that it decided to stop the sole agency contract for the wine Nero D’avola Feudi Del Pisciotto  from June 14, 2018.

 

 

Feudi Del Pisciotto is located in Sicily, Italy, founded by a media man in Italy in 2000. The winery has some cooperation with Versace’s designer Donatella Versace., but it does not belong to the luxury brand Versace. If you compare the two carefully, you will notice the differences between the wine label and Versace logo.

 

According to some business insider, Interprocom terminated for the reason that this wine is being sold by other importers at the same time in mainland China.

 

Brand owner keeps a foot in both camps

 

WBO received an sole agency authorization signed by brand owner and Interprocom. The authorization shows that Interprocom is the only importer in mainland China for Nero D’avola Feudi Del Pisciotto, which came into force in July 1, 2016 until June 30, 2020.

 

It is interesting that in 2016, another importer named Wine Art (Fujian) also claimed to distribute Nero D’avola Feudi Del Pisciotto and held a new product release conference during China Food and Drinks Fair in Fuzhou.

 

According to Xue Dezhi, president of Wine Art, Feudi Del Pisciotto  grants the agency to two Chinese importers. He also presented an English document, which was empowered by the winery with the same label. But Xue’s letter of authorization showed no word of “sole agent” and period of cooperation.

 

 

Cross Region Sales is common in China market, and wineries has no price protection policies

 

Through the in-depth investigation, Nero D’avola Feudi Del Pisciotto is sold to more than the mentioned two importers. According to a distributor of the wine, distribution of this wine goes disorderly in terms of region and price.

 

This wine distributor introduces: I compared to three importers and finally decided to make the order from the one who give me the best price.

 

 “The brand side has no protection to that wine, cross region sales is common and the price also became transparent. On one occasion, I bought the wine which was suspected to be fake and different in the package and taste with the real one”, said the distributor.

 

Why such a wine can be this hot in China market? This wine distributor analyzed: due to Versace-look label, and the high-end packaging which give consumer a very elegant impression, that’s the driving force.

 

Winery has the obvious side effect of profit maximizing in short-term

 

In the course of international trade of wine, why do such incidents always happen?

 

In this regard, an importer said that some wineries, though not famous, still feel that they are the real owners of the brand and label, and they have the initiative at any time.

 

In fact some commercial brands have high output each year, and if the former importer cannot accomplish the sales volume requirements, their cooperation can be torn up at any time. Anyway, they only want to sell goods, not plan to build brand, and Chinese importer to fight international lawsuit is also troublesome than imaged. Some wineries simply use these importers and distributors.

 

A wine market observer pointed out: “Chinese importers usually encounter similar embarrassments. No matter whether the brand is built or not, it is possible to change the cooperation. After all, many wineries hope that the market will become bigger and bigger and sell more wines. This is just like a game.”

 

Certain importers disclosed: In the past few years, price of Nero D’avola Feudi Del Pisciotto went disorderly in China market, the wine was priced a few hundred RMB, but some distributor sold it at an extremely low price about 70RMB/bottle. Due to price problem, many insiders who have demands reduced sharply in recent two years.

 

 

Any precautions for Chinese importers?

 

A wine importer in Shanghai analyzed, some foreign wineries complied with importer's entire request for exploring China market in early period, but with the increasing understanding about China, they found China market was larger and was also given some temptations by other importers.

 

Some winery kept the former cooperation while some broke their contract, especially for those big and less-known producers, policies changed with their executives change.

 

Therefore, Lin shared his views on recovering loss in case of such problems.

First

If there are unpaid and unsold wines, importers must hold back and talk about compensation with producers.

Second

If the producer already has new importers, the former importers may try to sell at a low price, forcing new importers to buy the wines for sustaining regular price system, obtaining compensation through them.

Third

Hunt for new brands to replace the absence of the former one immediately.