E&J Gallo and Nanpu ceases partnership in China

California’s family-owned winery E&J Gallo has reportedly broken off its distribution partnership with Nanpu Group, a major wine and spirits importer in China, according to various Chinese media reports.

Nanpu, the distributor of E&J Gallo’s entry-level Carlo Rossi for over a decade, has reportedly parted ways with the giant California wine producer, Chinese media Wine Business Observer has reported, citing local distributors of the wine brand.

It’s unclear why the two companies decided to part ways, but some distributors cited in the original Chinese report said it might be the fact that Nanpu struggled to achieve Carlo Rossi’s sales target.

Nanpu’s CEO Lin Jianhua had revealed the company was targeting sales of 1.5 million cases by 2020.

Gallo is the biggest wine producer in the world, accounting for 2.7% of world’s wine production, according to Euromonitor International.

Carlo Rossi is one of Gallo’s fastest selling wine brands and, from 2005, it has been distributed in the mainland by Nanpu.

At the height of Carlo Rossi’s popularity in China in 2014, its sales totalled 770,000 cases, accounting for 55% of American wine exports to China in that year, as reported by Chinese trade news portal tjkx.com.

The popularity of the wine brand in China has made it vulnerable in the face of counterfeiting as well. Last February, police in Songjiang District in Shanghai uncovered roughly 3,000 cases of counterfeit Carlo Rossi worth 800,000 RMB (US$116,000).