Tequila targets China as 2nd largest importer

04 October, 2013

The Tequila Chamber (CNIT) is working on a campaign to develop China into the category’s number two export market, now that Chinese tequila-importation laws have been relaxed.

With the support of the Mexican Government, the CNIT is about to launch a promotional campaign aimed at propelling consumption of tequila in China to “10 million litres a year” over a five-year period.

The US is currently the category’s largest market, home to an estimated 50% of volume.

Francisco Soltero Jiménez of the CNIT told Drinks International that the law change - which now means all 100% agave tequilas are permissable in China - had caused the promotional body to change tack.

He said: “The President of China visited Mexico and both governments agreed that China will issue a special procedure to allow the entrance of Tequilas that comply with the Mexican standard for this product.”

“Before this, China's regulations only allowed the entrance of spirits with a maximum of 2mg/L of methanol, while tequilas (mainly 100% agave) can have up to 3mg/L of methanol, so many of those tequilas were not allowed to be sold in China.”

According to Jesús Hernández, master distiller of Olmeca – which was unaffected by the regulations - the problem was one of classification. “My understanding is that the Chinese grouped tequila as a white spirit, which have lower levels of methanol.

“So Mixto (which has up to 49% cane or corn spirit) could pass but some 100% agave tequilas were higher [than what was allowed]. The fibres of the agave produce the methanol but agave also generates the flavour.”

The CNIT's Jiménez added: “This change in the regulations has been very well received among tequila producers who are now starting to send more and more 100% agave tequilas to China. At the end of July there was an event here in Mexico to officially recognise the five new brands to [enter] China."

One brand to benefit from the law change in China is Patrón.

Greg Cohen, director of corporate communication at Patrón Spirits, said: “We're seeing very positive momentum. Our distributor in China reports that, now that 100% agave tequilas are permitted, already many people have been requesting Patrón at bars, nightclubs and restaurants. Also, there's inherent appreciation in China for premium products, and so that too helps create demand for a brand like Patrón.

“Having said that though, the Chinese market is still very much dominated by brown spirits, and so we have quite a lot of work to do to educate consumers and the trade about our brand, and about the ultra-premium tequila category.”

“Remember that 51% agave tequilas [Mixto] have been available in China for some time, and so our collective challenge (among all 100% agave tequilas) is to educate people about what makes high-end tequila so different, and better, than the tequilas they may already be familiar with.”

At Olmeca tequila, China is now the sixth largest market, with its super-premium Altos line making the most headway.

Global marketing director of Olmeca, Lisa McCann said: “The Chinese are seeing Olmeca as a 'premium opportunity' but there’s a long way to go in China. We are there, but we still have a lot of work to do.”

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