Are we about to see more South American wine in China?
China has opened up a direct shipping route to Peru amid ongoing tensions with the US. Eloise Feilden explores what this means for wines from South American countries including the likes of Chile and Argentina. The post Are we about to see more South American wine in China? appeared first on The Drinks Business.
China has opened up a direct shipping route to Peru amid ongoing tensions with the US. Eloise Feilden explores what this means for wines from South American countries including the likes of Chile and Argentina.
Guangzhou Port, the largest shipping hub in southern China, opened a direct route to Peru's Chancay port at the end of April, Chinese broadcaster CCTV has reported.
The move is an attempt to reduce logistics costs and bolster Chinese trade with South America amid a tariff war with the US.
Located north of Lima, Chancay port recently began operations with non-stop journeys to and from Asia. A 300-metre vessel holding more than 400 containers is currently en route to Peru from Guangzhou; the journey is expected to take 30 days and reduces logistics costs by around 20%.
The new route will also accelerate the connection between Guangzhou Nansha Port and South American ports such as Mexico's Port of Manzanillo and Chile's Port of San Antonio.
Commodities from China including auto parts, refrigerators and household appliances will now reach South America more easily. In the other direction, fruits, seafood and red wine from the Andes will also appear in China faster.
So what impact will the new route have on wine producers in South America?
Magdalena Pesce, CEO of Wines of Argentina, which represents producers across the country, told the drinks business that the organisation has been "closely monitoring developments in global shipping and logistics, including the reported new direct shipping route from China to Peru".
She noted that the benefit of the new route is yet to be fully realised. "While any improvement in efficiency and cost-effectiveness for shipping to key markets like China is of interest to our producers, it's important to note that Argentine wine producers often utilise existing shipping routes through Chile for exports to Asia. Therefore, the potential impact of the Peru route would need to be carefully evaluated in the context of current logistics," Pesce said.
However, she is hopeful that "reduced shipping times and costs could enhance the competitiveness of Argentine wines in the Chinese market, potentially benefiting our exports in the long term".
The Chancay port has capacity to accommodate the largest vessels on South America's Pacific coast.
The new direct shipping route is a sign of Beijing's intention to strengthen its relationship with South American nations amid ongoing tensions with the US.
US President Donald Trump's decision to impose tariffs on almost all international markets currently includes levies on Chinese goods as high as 145%. For countries in South America, the import tariffs are much lower, currently sitting at 10% for Chile and Argentina. However, Pesce said the situation continues to be a "significant factor for our industry".
"We recognise that tariffs can create challenges. To address this, Argentine producers are working closely with their US importers and distributors to explore strategies that minimise the direct pass-through of increased costs to consumers," she said.
"This collaborative approach aims to maintain stable pricing and ensure continued access to Argentine wines for US consumers, while navigating the complexities of the current trade environment."
Pesce said that Wines of Argentina continues to focus most strongly on its core markets — the likes of the US, Brazil, Canada, the UK and China.
"Simultaneously, we continue to monitor opportunities for growth and diversification in South Asia and Latin America, recognising their potential for the future," she said.
Guangzhou Port, the largest shipping hub in southern China, opened a direct route to Peru's Chancay port at the end of April, Chinese broadcaster CCTV has reported.
The move is an attempt to reduce logistics costs and bolster Chinese trade with South America amid a tariff war with the US.
Located north of Lima, Chancay port recently began operations with non-stop journeys to and from Asia. A 300-metre vessel holding more than 400 containers is currently en route to Peru from Guangzhou; the journey is expected to take 30 days and reduces logistics costs by around 20%.
The new route will also accelerate the connection between Guangzhou Nansha Port and South American ports such as Mexico's Port of Manzanillo and Chile's Port of San Antonio.
Commodities from China including auto parts, refrigerators and household appliances will now reach South America more easily. In the other direction, fruits, seafood and red wine from the Andes will also appear in China faster.
So what impact will the new route have on wine producers in South America?
Magdalena Pesce, CEO of Wines of Argentina, which represents producers across the country, told the drinks business that the organisation has been "closely monitoring developments in global shipping and logistics, including the reported new direct shipping route from China to Peru".
She noted that the benefit of the new route is yet to be fully realised. "While any improvement in efficiency and cost-effectiveness for shipping to key markets like China is of interest to our producers, it's important to note that Argentine wine producers often utilise existing shipping routes through Chile for exports to Asia. Therefore, the potential impact of the Peru route would need to be carefully evaluated in the context of current logistics," Pesce said.
However, she is hopeful that "reduced shipping times and costs could enhance the competitiveness of Argentine wines in the Chinese market, potentially benefiting our exports in the long term".
The Chancay port has capacity to accommodate the largest vessels on South America's Pacific coast.
The new direct shipping route is a sign of Beijing's intention to strengthen its relationship with South American nations amid ongoing tensions with the US.
US President Donald Trump's decision to impose tariffs on almost all international markets currently includes levies on Chinese goods as high as 145%. For countries in South America, the import tariffs are much lower, currently sitting at 10% for Chile and Argentina. However, Pesce said the situation continues to be a "significant factor for our industry".
"We recognise that tariffs can create challenges. To address this, Argentine producers are working closely with their US importers and distributors to explore strategies that minimise the direct pass-through of increased costs to consumers," she said.
"This collaborative approach aims to maintain stable pricing and ensure continued access to Argentine wines for US consumers, while navigating the complexities of the current trade environment."
Pesce said that Wines of Argentina continues to focus most strongly on its core markets — the likes of the US, Brazil, Canada, the UK and China.
"Simultaneously, we continue to monitor opportunities for growth and diversification in South Asia and Latin America, recognising their potential for the future," she said. 
