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Industry

Feature: U.S. distillers confident in fast-growing Chinese market

February 14, 2020


Abstract : Looking at the prospect for the U.S. liquor industry, David Ozgo believes "There's definitely a market there" in China.

by Xinhua writers Luo Jingjing, Liu Yanan

NEW YORK, Feb. 13 (Xinhua) -- Looking at the prospect for the U.S. liquor industry, David Ozgo believes "There's definitely a market there" in China.

U.S. distilled spirit exports to China have been "fairly small" in both volume and value compared to other overseas markets, he noted, while China's middle class is growing fast, as is Chinese consumption of Scotch whisky.

Ozgo, senior vice president of economic and strategic analysis at the Distilled Spirits Council of the United States (DISCUS), like other U.S. liquor manufacturers, is confident about the growth potential of the Chinese market in the long run.

DISCUS is working through a market access program to introduce U.S. distillers, big or small, and their products into the Chinese market. "That's one of the things we do ... to help promote American whiskey in China," he told Xinhua on Wednesday during the council's annual briefing for media and analysts.

Data shows U.S. supplier sales of distilled spirits at home recorded 29 billion U.S. dollars in 2019, up 5.3 percent year-on-year. But Americans export more liquor than they consume, with China accounting for part of that. "From our perspective, it's potentially a very big export market," Ozgo said.

Tom Potter, president of the New York Distilling Company, shares Ozgo's opinion about the industrial outlook.

"Obviously, the importance of the Chinese economy and the growing of the middle class has attracted even tiny companies like ours," he said.

"We do feel it could be a really important market for us," he added.

Potter runs a business with 15 full-time workers to produce high-end American rye whiskey. U.S.-China trade disputes have affected its expansion into the Chinese market.

But he is still confident and committed.

"We want to plant the seeds," he said, referring to a cooperation with a Shanghai-based distributor to provide a platform for its products to be better known in China.

"That kind of an anchor, a place to start was really valuable for us. So that would be our strategy in China," said Potter. "We are looking to the future and thinking that it could be a very important market for us."

The industry welcomes the phase-one trade deal signed between China and the United States. Christine LoCascio, the DISCUS chief of public policy, said, "We hope the United States and China continue their negotiations and our exports to China will return to the 5 and 10 percent tariff rates that they faced prior to the trade disputes escalation."

On this, Ozgo couldn't agree more. "It means we're heading in the right direction," he said. "We want to have good relations with China."

Potter said, "It takes a lot of time to build trust in the export market and to develop the relationships with the distributors with the retail trade."

"I believe international sales are very important for ... all the people making craft whiskey. But in a high-tariff environment, the potential just is sharply reduced," he added.

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Keyword: China-U.S

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