DGB signs distribution agreement with COFCO

DGB Pty Ltd, South Africa’s largest independent wine, spirits and craft beer producer, has announced an exclusive distribution agreement with China’s state-owned COFCO as the country has become the biggest Asian market for South African wine by volume and the sixth largest export destination for South Africa. 

Henk van der Westhuyzen, DGB Pty Ltd. strategic planning director; Greg Guy , DGB Pty Ltd. international director; Castle Li, general manager of COFCO W&W International Co., Ltd; Frank Li, brand marketing and procurement director of COFCO W&W International Co., Ltd.

Based on the agreement, COFCO will operate as the South African producer’s sales, marketing and distribution partner. COFCO will also, in the initial phase, exclusively import and market DGB brands Boschendal and Tall Horse, with the expectation to later expand the portfolio with other brands from the DGB wine stable.

DGB intends to focus a lot on this market and the agreement with COFCO is a huge boost for its plans in China. Apart from its standing in the foodstuffs division, COFCO’s wine division, COFCO Wine & Spirits is also one of the largest wine importers in China, and the owner of one of the major domestic producers, Great Wall. 

China has become an increasingly important market for South African wineries. South Africa has seen its market share improving, as interest in wine in China starts to extend beyond “traditional” Old World wine producing countries. In 2016, China imported 9.6 million litres of bottled wines worth about US$34.7 million from South Africa, according to China Association of Imports and Exports of Wine and Spirits.  

Castle Li, general manager of COFCO Wine & Wine, says: “We are proud to be associated with the well-respected South African industry leader, DGB. Chinese consumers are showing increased interest in New World wines, and we believe DGB, with its diverse portfolio, is well-positioned to provide in this need. The Boschendal and Tall Horse brands offer two of the great market drivers: value and reputable quality. We look forward to increase awareness and associated demand for these DGB brands in the market, and foresee a longstanding relationship.”

According to DGB’s CEO, Tim Hutchinson, COFCO’s distribution and marketing strength in China will ensure the availability of DGB’s brands across a diverse range of cities and channels, and bolster the image and growth of South African wines in China.

“Tourism numbers from China to South Africa are showing dramatic growth and this will give the country and our wines some excellent exposure. We are extremely excited with our new relationship with a strong, experienced and dynamic business such as COFCO.”

“We have noted an increasing interest in the South African wine category as consumers are becoming more adventurous and willing to make new wine discoveries. We are confident that the quality, heritage and authenticity of our brands will resonate with Chinese consumers,” he said.