Imports of French Wine in China

Imports of french Wine in chinawargonReport on cut vino from France to mainland ChinaFrance sh ared some one triad of the mo wine market in China. And China is now the fifth biggest export destination for french wine. In Figure 1, we briefly describe the merchandioceannt process of french wine from France to China.Figure 1. Main Process of French Wine Supply scopeThe supplier in the depict chain is the French vinery. The manufacturer, winery, purchase the grapes from the vineyard and ship the wine to bottling estate. The French wine import company, as the distributor, import different brands of French wine and whence distribute totally the French wine to retailers in China such as Carrefour and Walmart. At last, Chinese nodes can buy French wine from these retailers. Regarding to the organizational earnings in this case, wineries or agencies of the import companies play the role of shipper. And the import companies play the role of consignee. At port of arrival, the financial flows are from import companies which is the distributor to the forwarder and margin from forwarder to customs, inspection authorities, on carriers and shipping line agent from shipping line agents to port authorities, port services, customs and terminal operators. At port of departure, the financial flows are from shipping line agents to port authorities, customs, port services and terminal operator from forwarders to insurance companies, pre-carriers and shipping line agents from wineries or agents of import companies, which are the shippers in this case, to the forwarder. And impute the organizational network in ports of departure together with the network in ports of arrival, the financial flow as well exists from banks in ports of arrival to banks in ports of departure and from banks in ports of departure to the wineries or agents of import companies. When it comes to the logistics network, the goods flows generally follow the main process of the supply chain. Win es are bottled by bottling estates and stuffed in empty containers and then changeed to the export terminals. Containers with wines then collected and coreed on sea vessels and arrive import terminals. At last, after discharged from sea vessels, wines can be collected by import companies and distributed to retailers. If we put the supply chain processes into a pass view, the procurement vibration is between wineries/bottling estates and vineyards/bottles suppliers. The manufacturing cycle is between wineries/bottling estates and French wine import companies. The replenishment cycle is between French wine import companies and retailers such as Carrefour and Wal-mart. And the customer order cycle is between retailers and customers such as restaurants and individuals. On the other hand, if restaurants or other customers place orders directly to the import companies, the import companies bypass the retailer such as Carrefour and Wal-mart, then the customer order cycle will be betwe en customers and import companies, and the replenishment and manufacturing cycle will be between import companies and wineries. If we put the supply chain in a push/pull view, retailers execute the process in the customer order cycle after the customer order arrives. All processes that are part of the customer order cycle are pull processes. And other processes from suppliers to retailers are push processes because they respond to speculated rather than actual demand. If we as well take direct order from customers to import companies into consideration, the push/pull boundary will be between import companies and customers, and import companies will be the actual retailers in this situation.There are some(prenominal) impartation activities involve in French wine. First, vineyards ship fresh grapes to the wineries. Second, wineries will use the producing process to brew wine. Third, wines will be transported to bottling estates to subpackage them to wine bottles or hardly handled by bulk in barrels. Meanwhile, empty bottles and corks are transported to bottling estates for bottling French wines. No matter what kind of packages, bottles or bulk, wine will be loaded to containers. The containers which load wine bottles or barrels will be shipped by sea transport or air transports.Figure 2. Sea transport route from France (Paris) to China (Shanghai)The sea transport route from France (Port Rouen) to China (Shanghai) is mainly through the Suez Canal and showed in Figure 2. After wine arrive at the port, they will be stored in warehouse of distributors. When Distributors received orders from retailors, they will ship the wine to retailors warehouse and customers are able to purchase French wines from retailors, just like Wal-mart or the surf of vintner. On the other hand, some big customers, for instance, hotels will give orders directly to the distributors to get French wine and they store wines in their cellar.The main packages used to transport wines are barr eled or bottled, they will all be loaded into containers for further sea transport or air way which we mentioned above. However, bottled wines are more than popular than bulk ones to individual custumers and restaurants. Due to glass bottles are fragile cargo, transport requirements are undoubtedly more higher than normal goods. Reefer containers are requested for several(prenominal) types of wines to maintain the transport temperature at about 10 degree centigrade, which cause transport costs for wines are higher. For French wines, storage and discourse procedure happen in all process of supply chain. The storage of fresh grape in vineyards and wineries. The wines stored during manufacturing procedure and warehouses of distributors and retailors. The main handling process of French wines to China is container ship voyage and showed in figure. After arriving at China port, wines will be discharged from containers and sent to distributors warehouse. Finally wines will be delivered to last destination that is retailors shops according to retailors order. This is the main logistics network design of French wine to China.To assess important supply chain characteristics of French wine to China, we have to agnise French wines characteristics and their customers. The transport requirements of French wines are high ascribable to the frangibility of glass bottles and a constant temperature is requested in the whole supply chain of French wine. On the other hand, French wines are variable and classified to different levels, from Vin de Table to A.O.C so that target customers are totally different. As a consequence of that, the uncertainty of French wines to China are higher than normal drinking supply chain, such as fruit juice or bears.From the book of Sunil Chopra and calamus Meindl, supply chain responsiveness including the definitions Respond to wide ranges of quantities demanded Meet short lead times Handle a large variety of products Build super innovative products Meet a high service level and Handle supply uncertainty. Based on Chinese custom notifyChinese imports of wines increased from 2.86 hundred million in 2010 to reach 3.95 hundred million in 2012. French wines share about one of third import wine market of China. The quantities and variety of French wines increasingly raised and their characteristics of high value-added than normal beverage require a higher service level. From the question 3, we estimate the transport and warehousing costs of the final product price which we notice the transport cost of French wine to China are higher than normal beverage like Coca-Cola is about 6% of final price. So supply chain efficiency of French wine supply chain is not great due to costs of manufacturing and delivering to customer is not average compared to other beverage supply chain.The outstanding hem in wine is a famous wine brand in China which manufacture in Hebei Province and all its supplier is from China. It is very clear t hat the transport cost, labor cost and material cost are patently lower than French wines that manufactured in France and bottled in France. And the target market of The Great Wall is focus on the low-end market so that the price of The Great Wall is also lower than some brands of French wines. A normal bottle of The Great Wall retail price in 750 ml is about 3 to 5 euro and a French one is about 10 to 15 euro. According to a Chinese wine information website, the profit of French wines in China is about 30%50% and Chinese wines are only about 11% which is much lower than French wine. From the aspect of supply chain characteristics, Chinese wines are not like French wines, the brand of Chinese wines are much less and manufactured by only several big companies. Due to focal warehouse and manufacture with headquarter in China, Chinese wines supply chain can use minimize inventory and pursue the utmost cost of transport. The Great Wall can predict the market more accurate than French wine company and the uncertainty of domestic supply chain is lower.The conclusion is that The Great Wall wine compared to French wine supply chain is less responsive. However, its supply chain efficiency is greater than French brands merchandise from France.After evaluating the supply chain of French wine from France to China and comparing it with local brands, we conclude that the supply chain has some disadvantages as follows. Firstly, due to the sea transportation part, the transportation costs are much higher for French wine than those for local brands. Secondly, a French wine costomer places greater emphasis not on quantity of the product but the product variety and response time than on cost. So that wineries need to base their competitive strategies on costomer priorities. However, also due to the sea transportation part, wineries may fail to response immediately to costomers orders of French wines of different year. For example, once a costomer want one bottle of French win e produced in 2004, and he cant find it in Carrefour and Wal-mart, he will turn to local brands products. To solve this problem, our idea is to trope a new vineyard and chateau in China. Through this new strategy design of supply chain, wineries are able to transport French wines by track or railway instead of sea transportation, which can dramatically reduce the transportation costs for wineries. Furthermore, wineries dont need to cooperate with import companies any longer and take over the role of distributor, which can increase the supply chain ownership. Last but not least, this new supply chain strategy also fit the competitive strategy better since wineries can response immediately to costomers priority of product variety. On the other hand, it takes time for wineries to build local vineyard and chateau in China, so they have to keep the old supply chain strategy before the local vineyard and chateau are built. Besides, the investment in China also influence the profit of wi neries in the short run. But we believe that the new strategy is much better and it worth the investment in a long run.ReferencesSearates database (2015), Sea Route from Paris to Shanghai, Searates,http//www.searates.com/services/routes-explorer/?filter-st=1from=alat=48.856614alng=2.3522219000000177to=blat=31.230416blng=121.473701container= derived in 2015.1.10Chopra S, Meindl P. Supply chain management. Strategy, planning operation M. Gabler, 2007.Weining Du, French Wine consequence and distribution in Shanghai D. East China University of Science and Technology, 2010.Xudong Pan, A study on China Coca-Cola Supply Chain Model D. Xiamen University, 2002.Anonymous (2012), Statistics report about 2012 Import wines, wine.cn,http//www.wine.cn/html/201302/17560.html derived in 2015.1.11Great Wall Wine Staff (2015), Brand Introduction of Great Wall Wine, Great Wall Wine,http//www.greatwallwine.com.cn/pinpaijieshao.html derived in 2015.1.10