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US firm hopes deal will open up market for californian wines

VATS the way I like it! Constellation Brands inks China wine deal

By Ben Bouckley+

26-Mar-2014
Last updated on 26-Mar-2014 at 14:15 GMT

Emilliano de Laurentiis/Flickr
Emilliano de Laurentiis/Flickr

Constellation Brands has signed a long-term strategic deal with China’s VATs Liquor to develop the world’s best-selling table wine Robert Mondavi in the country.

The deal hands VATS, which is based in Hong Kong, exclusive marketing and promotion rights regarding the Californian brand in China.

Constellation and its new partner expect the deal to last several decades, and a release regarding the deal notes VATS’ “vast distribution network and knowledge of the Chinese consumer”.

Growing wine demand among middle classes

Wu Xiangdong, chairman, VATS Group and VATS Liquor said that Robert Mondavi would satisfy the growing wine consumption of the middle class, and escalate the wine business development of VATS Liquor.

“China is the fifth largest wine consumption market globally and is projected to be a key driver of total global wine growth during the next five years,” he said.

"The vision of both VATS Liquor and Constellation is to build Robert Mondavi to the number one imported premium wine brand in China.”

Constellation Brands president and CEO, Rob Sands said the deal furthered his company’s international strategy as Jay Wright, president of Constellation’s Wine and Spirits division noted that most US wines have very little brand recognition in China.

Most US wines have little brand recognition in China

“Most American wines have very little brand recognition in China, however the Robert Mondavi name is recognized as a synonym for quality, craftsmanship and taste,” he said.

“Through VATS Liquor’s distribution network, Constellation will leverage that recognition and capitalize on this unique opportunity to increase exports of California wine and build brands through the Robert Mondavi name,” Wright added.

“With the deep roots we are cultivating, we intend to shape this important market and make these wines available to more Chinese consumers,” he said.

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